Richard Erstad
About Richard Erstad
Richard G. Erstad, age 61, has served as Vice President, General Counsel and Secretary of Hawkins, Inc. since 2008; he previously was General Counsel and Secretary of BUCA, Inc. (2005–2008) and an attorney in Faegre & Benson LLP’s corporate group (1996–2005). He is a member of the Minnesota Bar . Company performance over 2023–2025 shows strong alignment with incentive metrics: total shareholder return (value of $100 investment) rose from 275.81 (2023) to 667.97 (2025), while net income increased from $60.0M to $84.3M and income before income taxes (the primary compensation metric) increased from $82.6M to $114.4M .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Faegre & Benson LLP | Attorney, Corporate (Securities/M&A) | 1996–2005 | Public company securities and M&A expertise supporting later GC roles |
| BUCA, Inc. | General Counsel & Secretary | 2005–2008 | Led public company legal and governance; prepared for Hawkins GC role |
External Roles
- No public-company directorships or external board roles disclosed .
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Salary ($) | 325,000 | 337,000 | 369,885 |
| Stock Awards ($) | 211,241 | 219,046 | 281,199 |
| Non-Equity Incentive ($) | 196,690 | 269,600 | 266,270 |
| All Other Compensation ($) | 59,950 | 62,561 | 50,252 |
| Total ($) | 792,881 | 888,207 | 967,606 |
- Base salary changes (effective dates): increased to $337,000 in June 2023 (+4%); increased to $375,000 in May 2024 (+11%) .
- Retirement/perquisites: nonqualified deferred compensation contribution and 401(k) match; perquisite limited to personal use of a company car .
| Retirement Contributions | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Nonqualified Deferred Compensation ($) | 30,500 | 33,000 | 34,500 |
| Employer 401(k) Match ($) | 14,850 | 14,850 | 14,850 |
Performance Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Annual Cash Incentive Weighting | 100% Corporate (Income before taxes) | 100% Corporate (Income before taxes) | 100% Corporate (Income before taxes) |
| Corporate Metric Target ($000s) | 73,475 | 74,250 | 105,537 |
| Corporate Metric Actual ($000s) | 81,011 | 104,128 | 114,383 |
| Corporate Non-Equity Payout (% of target) | 151.3% | 200.0% | 142.0% |
| RSU Target Shares (#) | 5,514 | 5,087 | 3,671 |
| RSU Earned Shares (#) | 6,652 | 7,630 | 4,442 |
| RSU Earned (% of target) | 121.0% | 150.0% | 121.0% |
| Annual Cash Incentive Opportunity (Threshold/Target/Max as % of salary) | 20%/40%/80% | 20%/40%/80% | 25%/50%/100% |
| RSU Vesting | Shares issued for FY performance vest 100% ~2nd fiscal year after performance: Mar 31, 2025 (6,652); Mar 30, 2026 (7,630); Mar 29, 2027 (4,442) |
Equity Ownership & Alignment
| Beneficial Ownership | As of Jun 7, 2023 | As of Jun 5, 2024 | As of Jun 6, 2025 |
|---|---|---|---|
| Shares Beneficially Owned (#) | 62,614 | 66,087 | 67,196 |
| Percent of Shares | <1% (*) | <1% (*) | <1% (*) |
| ESOP Beneficial Interest (#) | 2,448 | 2,448 | 2,448 |
| Outstanding Unvested Equity | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Unvested Shares/Units (#) | 30,914 | 23,442 | 18,724 |
| Market Value ($) | 1,353,415 (at $43.78) | 1,800,346 (at $76.80) | 1,987,365 (at $106.14) |
- Stock options: Company has not granted options in recent years .
- Hedging/pledging: Hedging prohibited; pledging and margin accounts prohibited .
- Ownership guidelines: Not disclosed in proxies.
Employment Terms
- Role and tenure: Vice President, General Counsel & Secretary since 2008 .
- Executive Severance Plan: Tier changed from Tier 4 (FY2024) to Tier 2 (FY2025), improving salary continuation and CoC protections . Double-trigger CoC severance (termination without cause or for good reason in connection with CoC) with extended salary continuation, pro-rata target bonus, and retirement-plan contribution equivalents .
- Equity acceleration: Death/disability accelerates to 100% of target; corporate transaction/CoC triggers immediate vesting if awards not continued; if continued, termination without cause or for good reason causes immediate vesting of earned/target shares .
| Severance Scenario (as of FY2025) | Termination Without Cause (No CoC) | Death or Disability | Termination Without Cause or For Good Reason in CoC | CoC Without Termination |
|---|---|---|---|---|
| Salary Continuation ($) | 375,000 | — | 562,500 | — |
| Medical/Dental Coverage ($) | 13,756 | — | 20,634 | — |
| Outplacement ($) | 20,000 | — | 20,000 | — |
| Target Bonus ($) | — | — | 281,250 | — |
| Profit Sharing/401(k) ($) | — | — | 25,875 | — |
| Equity Acceleration ($) | — | 1,905,531 | 1,905,531 | — |
| Vesting of Outstanding Equity ($) | — | — | — | 1,987,365 |
- Covenants: Must agree to covenants (non-disparagement, confidentiality, non-solicitation) and release of claims to receive benefits .
- Clawback: Executive incentive compensation subject to Dodd-Frank Rule 10D-1-compliant clawback policy .
Performance & Track Record
| Measure | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Total Shareholder Return (Value of $100 investment) | 275.81 | 483.32 | 667.97 |
| Net Income ($) | 60,040,662 | 75,363,461 | 84,344,717 |
| Income Before Income Taxes ($) | 82,581,581 | 101,145,040 | 114,382,480 |
- Say‑on‑pay: ~94% approval in Aug 2023; ~95% approval in Aug 2024, reinforcing shareholder support for pay design .
- Stock vested in FY2025 for Erstad: 9,160 shares; value $683,519 (FY2022 award vesting in FY2025) .
Compensation Structure Analysis
- Pay-for-performance: Annual cash incentive and RSUs entirely tied to corporate income before taxes (100% weighting for Erstad), producing 121–150% RSU outcomes and 142–200% cash payouts depending on year .
- Mix trend: FY2025 moved Erstad’s cash incentive slope higher (threshold/target/max changed to 25%/50%/100% from 20%/40%/80%), modestly increasing cash at-risk alignment with higher corporate targets .
- Severance escalation: Tier upgrade from Tier 4 (FY2024) to Tier 2 (FY2025) increases potential severance and CoC benefits—improves retention but raises potential change‑in‑control economics .
- No options; equity is RSU-based with two-year service vest—a retention lever with near-term insider selling pressure primarily from tax withhold share forfeitures (late Form 4 noted) rather than discretionary selling .
Equity Ownership & Alignment
- Growing beneficial ownership (62,614 → 66,087 → 67,196 shares) with scheduled vesting in March 2026 (7,630 shares) and March 2027 (4,442 shares) supports alignment; no hedging/pledging permitted .
- Outstanding unvested equity value increased despite lower unit counts given stock appreciation (from $1.35M in FY2023 to $1.99M in FY2025), enhancing at‑risk orientation .
Employment Terms
- Start date/tenure: GC & Secretary since 2008 .
- Executive Severance Plan: Tier 2 (FY2025), 12 months salary continuation (no CoC) and 18 months in CoC; double‑trigger with target bonus and plan contribution equivalents; equity acceleration rules per Plan and award agreements .
- Definitions: Change in control definitions include >50% voting power change, corporate transaction, or board composition change; “good reason” includes material pay decrease, material duty change, relocation >50 miles, or material breach .
Investment Implications
- Strong alignment: Compensation entirely tied to pre‑tax income plus RSU structure, and rising TSR/net income/IBIT, indicate robust pay-for-performance linkage .
- Retention risk moderate: Significant unvested RSU values and fixed two-year vesting cadence favor retention; Tier upgrade (FY2025) further reduces departure risk but elevates potential CoC payouts .
- Trading signals: Upcoming RSU vesting (Mar 30, 2026; Mar 29, 2027) may lead to withholding-related Form 4 activity (not discretionary selling); hedging/pledging prohibitions limit misalignment risk .
- Governance quality: Clawback policy in place; say-on-pay approvals ~94–95%; no options or option repricing; no tax gross‑ups in CoC—overall low red‑flag profile .