Michael Doar
About Michael Doar
- Executive Chairman of Hurco Companies since March 2021; previously Chairman & CEO (2001–Mar 2021), President (Nov 2009–Mar 2013), and director since 2000. Age 69. Prior roles include Vice President of Sales & Marketing at Ingersoll Contract Manufacturing and other management positions at Ingersoll International from 1989 .
- 2024 performance context: sales/service fees $186.6M (down 18% YoY) with net loss of $16.6M (includes $8.6M non‑cash tax valuation allowance); industry headwinds and lower shipments across regions and products were cited .
- 3‑year TSR for FY2022–FY2024 was −32.5%; ROIC PSU target for FY2022–FY2024 was not met (0% payout), while relative TSR PSUs paid at 71.79% of target .
- Board leadership: Hurco combines an Executive Chairman role with six independent directors and a Presiding Independent Director (Richard Porter) overseeing executive sessions—measures cited by the Board to counterbalance dual‑role risks .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hurco Companies, Inc. | Executive Chairman | Mar 2021–present | Provides continuity of strategy/oversight; facilitates Board/management/advisor access; supports capital allocation, ESG, and CEO/senior leadership development . |
| Hurco Companies, Inc. | Chairman & CEO | 2001–Mar 2021 | Led the company for 20+ years; deep domain knowledge of business, operations, competition, financials . |
| Hurco Companies, Inc. | President | Nov 2009–Mar 2013 | Oversaw operating functions and product/technology initiatives . |
| Ingersoll Contract Manufacturing Co. (subsidiary of Ingersoll International) | Vice President, Sales & Marketing | (Prior to 2000; start 1989 at Ingersoll International) | Commercial leadership in machine-tool systems; upstream experience in end-markets relevant to Hurco . |
| Ingersoll International | Various management positions | From 1989 | Progressive leadership in an international engineering/machine-tool systems business . |
External Roles
| Organization | Role | Years | Committees/Notes |
|---|---|---|---|
| Twin Disc, Incorporated | Director | Current | Nominating & Governance and Compensation & Executive Development Committees . |
Fixed Compensation
| Metric | FY2022 | FY2023 | FY2024 |
|---|---|---|---|
| Salary ($) | 476,856 | 453,848 | 400,437 (reflects temporary 10% reduction Apr 22–Oct 20, 2024) |
| Target Bonus % of Base | — | — | 85% |
| Non‑Equity Incentive Paid ($) | 356,792 | 191,353 | 0 (negative operating income margin triggers zero payout) |
| All Other Comp ($) | 92,620 | 86,803 | 72,611 |
- FY2024 base salary originally set at $414,221 before voluntary 10% reduction during Apr 22–Oct 20, 2024 as part of cost-cutting .
- FY2025 base salary set to $339,661 (−18% vs 2024) effective Jan 1, 2025 .
Performance Compensation
Short‑Term Incentive (FY2024)
| Metric | Weight | Threshold | Target | Exceeds | Max | Actual | Payout |
|---|---|---|---|---|---|---|---|
| Operating Income Margin | 70% | 3% | 6% | 8% | 10% | Below threshold (negative) | 0% |
| Strategic Objectives | 30% | 50%–200% of target (discretionary scale) | — | — | — | Some achieved, but blocked | 0% due to OI margin negative |
Notes: If operating income margin is zero/negative, no payout under the plan regardless of strategic objective attainment .
Long‑Term Incentive Structure
| Grant/Plan | Instrument | Performance Metric(s) | Weighting | Performance Period | Payout Scale | Vesting |
|---|---|---|---|---|---|---|
| 2024 LTI | PSUs | Average Net Income (PSUs–NI) | ~55% of PSU grant | FY2024–FY2026 | 50% (threshold), 100% (target), 200% (max) | Cliff at end of period; earned shares vest per plan |
| 2024 LTI | PSUs | Average Free Cash Flow (PSUs–FCF) | ~45% of PSU grant | FY2024–FY2026 | 50%/100%/200% | Cliff vesting |
| 2024 LTI | Restricted Shares | Time‑based | — | N/A | N/A | 1/3 per year over 3 years |
| 2022 LTI (earned in Jan 2025) | PSUs | Relative TSR vs peer group | — | FY2022–FY2024 | 71.79% of target paid | Vested Jan 7, 2025 |
| 2022 LTI (earned in Jan 2025) | PSUs | Average ROIC | — | FY2022–FY2024 | 0% (not earned) | — |
Doar’s 2024 LTI Grants (grant date Jan 4, 2024)
| Award | Units/Shares | Grant Date Fair Value ($) |
|---|---|---|
| PSUs – NI (target) | 16,720 | 359,982 |
| PSUs – FCF (target) | 14,630 | 314,984 |
| Restricted Shares | 10,450 | 224,989 |
Doar’s FY2022–FY2024 PSU Outcomes (certified Jan 7, 2025)
| Metric | Target PSUs | Actual PSUs Earned | Vest Date Fair Value ($) |
|---|---|---|---|
| Relative TSR | 10,801 | 7,754 (71.79%) | 153,607 |
| ROIC | 10,365 | 0 | 0 |
Equity Ownership & Alignment
- Beneficial ownership: 215,460 shares (3.2% of outstanding); includes 30,256 unvested restricted shares .
- Unvested/outstanding awards at FY2024-end:
- Time‑based restricted shares: 2,474 (01/04/22 grant; vested 01/04/25), 5,688 (01/03/23 grant; 1/2 vested 01/03/25, 1/2 vests 01/03/26), 10,449 (01/04/24 grant; vests in thirds over 3 years) .
- PSUs unearned: 12,793 (FY2023–FY2025 at threshold basis), 31,350 (FY2024–FY2026 at target basis) .
- Ownership/retention policies:
- Executive stock ownership guidelines require 5x salary for CEO; 3x for President (if separate); 2x for CFO/other executive officers. Net shares from vesting must be retained until in compliance; pledged shares do not count toward compliance .
- Hedging and pledging of company stock are prohibited for executives and directors (no margin, pledges, derivatives, or hedging instruments) .
- Clawback policy (Recoupment Policy) applies to incentive‑based compensation upon an accounting restatement; recovery covers 3 prior fiscal years and executives must reimburse recovery costs if necessary .
Vesting Calendar Indicators (potential supply/pressure)
| Grant | Type | Key Dates | Notes |
|---|---|---|---|
| 01/04/22 | Restricted | Vested 01/04/25 | 2,474 shares vested; increases tradable float for insider if sold . |
| 01/03/23 | Restricted | 50% vested 01/03/25; 50% vests 01/03/26 | 5,688 total; two tranches . |
| 01/04/24 | Restricted | 1/3 annually over 3 years | 10,449 total; standard 3‑year ratable vest . |
| FY2023–FY2025 | PSUs | Cliff after FY2025 | Threshold basis shown; payout contingent on NI/FCF goals . |
| FY2024–FY2026 | PSUs | Cliff after FY2026 | Target basis shown; payout contingent on NI/FCF goals . |
Employment Terms
| Term | Details |
|---|---|
| Agreement status | Employment agreements in place for Volovic, Doar, McClelland; current term runs to Oct 31, 2025 with auto 1‑year renewals (60‑day notice to stop) . |
| Severance (no CIC) | 9 months salary continuation + 1/12 of 3‑yr average bonus per month + 140% of company health cost per month; requires release . |
| Severance (within 12 months post‑CIC) | 18 months on same formula for Doar (double‑trigger) . |
| Non‑compete / restrictive covenants | Non‑compete, customer/employee non‑solicit, and IP/confidentiality protections included . |
| Equity on CIC | If not assumed or if terminated without cause within 18 months post‑CIC: restricted stock vests in full; PSUs vest at target pro‑rated for elapsed period; or cash‑out alternative at Committee’s discretion . |
| Potential payments as of 10/31/24 (illustrative) | Without cause/Good Reason pre‑CIC: severance pay $467,249; health coverage $36,397 . Within specified period after CIC or not assumed: severance pay $934,498; restricted shares $391,059; PSUs $740,437; health coverage $54,596 . |
| Deferred compensation | Participant in DCPII; FY2024 contributions $24,026; FY2024 earnings $435,240; aggregate balance $1,901,323 . |
| Perquisites | Leased auto ($25,133 FY2024), supplemental disability insurance ($8,845), 401(k) match ($20,700), split‑dollar life insurance ($17,933) . |
| Tax gross‑ups | Company states no excise tax gross‑ups; hedging prohibited; clawback in place . |
Board Governance and Director Service
- Board service: Director since 2000; Executive Chairman since Mar 2021; formerly Chairman & CEO (2001–2021) .
- Committees: Doar is not listed on Audit/Compensation/Nominating committees; those are fully independent .
- Independence/dual‑role mitigants: Six independent directors; Presiding Independent Director (Richard Porter) leads executive sessions, sets agendas, and interfaces with management; Board asserts this mitigates risks of combining executive and chair roles .
- Meetings/attendance: Board met 5 times in FY2024; all directors attended ≥75% of Board and committee meetings; all incumbents/nominees attended 2024 AGM .
- Director pay: Executive officers (Doar and CEO) receive no additional compensation for Board service; non‑employee director program includes cash retainers and annual restricted share grants (3,813 shares on Mar 14, 2024; vest at next AGM/1 year) .
Related Party Transactions
- FY2023: Sale of a machine (~$499,000) to a company in which Doar is >10% beneficial owner and his son is an owner/officer; described as ordinary course at pricing/terms generally available to direct customers .
- FY2024: No related‑person transactions requiring disclosure .
Compensation Program Architecture and Peer Benchmarking
- Pay‑for‑performance design with OI margin and strategic objectives in annual plan (70%/30% weighting) and NI/FCF in PSUs (3‑year period) .
- 2025 LTI mix shift: increase time‑based restricted stock portion to ~45% (from ~25%) to enhance retention and align with manufacturing/peer practices; PSUs retained with NI/FCF metrics .
- Peer group (FY2024) includes industrial/manufacturing comparables; for FY2025, DMC Global and UFP Technologies removed; Markforged Holding Corp. and Velo3D added; adjusted medians: revenue $265M, market cap $211M, employees 980 .
- Equity plan: As of Jan 7, 2025, 449,964 full‑value awards outstanding; 121,627 shares remaining; proposal to add 850,000 shares to plan reserve (projected total dilution to ~11.3%) .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay approval ~99% at 2024 AGM; 3‑yr and 5‑yr averages ~93% and ~92%, respectively; Committee views program as aligned with shareholder expectations .
Ownership Snapshot (Directors/Officers excerpt, as of Jan 7, 2025)
| Holder | Shares | % |
|---|---|---|
| Michael Doar | 215,460 (incl. 30,256 unvested restricted) | 3.2% |
| All current directors and executive officers (11) | 580,510 | 8.7% |
| Common shares outstanding | 6,644,286 | — |
Risk Indicators & Red Flags
- 2024 negative operating income margin led to zero annual incentive payout; FY2024 net loss (−$16.6M), with industry cyclicality commentary .
- Related party sale in FY2023 involving entity where Doar holds >10% interest; Audit Committee oversees related‑party approvals .
- Hedging/pledging banned; clawback policy compliant with Nasdaq rules .
- LTI history shows no above‑target PSU payouts in last seven completed cycles; two cycles with zero PSU payout—shift to more time‑based awards for retention in 2025 .
Director Compensation (as Director)
- Doar receives no additional compensation for director service beyond executive compensation (director retainers/equity apply only to non‑employee directors) .
Investment Implications
- Alignment: High equity exposure (3.2% beneficial stake) plus strict anti‑hedging/anti‑pledging and ownership guidelines support alignment; no STI payout in 2024 indicates performance sensitivity .
- Retention and potential selling pressure: Ratable vesting of sizable restricted share grants (2023/2024) and cliff PSU cycles create periodic liquidity windows; multiple tranches vesting in early January each year are notable for supply monitoring .
- Contractual economics: Double‑trigger CIC with 18‑month severance for Doar and accelerated vesting mechanics offer downside protection but are not excessive by small‑cap industrial standards; meaningful deferred comp balance ($1.9M) indicates long‑tenure capital at risk .
- Governance: Executive Chair structure is counterbalanced by six independent directors, a Presiding Independent Director, fully independent committees, and strong risk/recoupment policies; however, Doar’s executive chairmanship plus a 2023 related‑party transaction warrant continued oversight focus .
- Performance setup: 2024 downturn and negative OI margin reset incentive outcomes to zero; LTI remains levered to NI/FCF with potential upside on cyclical recovery, while 2025 shift toward more time‑based equity boosts retention but modestly lowers performance leverage in pay mix .