Michael Chanatry
Howmet AerospaceAbout Michael Chanatry
Michael N. Chanatry serves as Vice President and Chief Commercial Officer and is one of Howmet Aerospace’s Named Executive Officers (NEOs). His compensation is explicitly tied to company performance through annual cash incentives weighted to Adjusted EBITDA and Free Cash Flow, and long-term PRSUs linked to multi-year Adjusted EBITDA, Adjusted EPS, and relative TSR against an aerospace peer group . Company context for 2024: Adjusted EBITDA excluding special items was $1,914M and Adjusted Free Cash Flow was $977M; the corporate annual incentive plan paid out at 200% due to exceeding maximum targets and achieving strategic goals, and the 2022 PRSU award’s 3-year relative TSR ranked highest in its peer group (120% TSR multiplier) .
Fixed Compensation
Summary Compensation (Chanatry)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $527,500 | $546,667 | $570,833 |
| Non-Equity Incentive Plan Compensation ($) | $265,860 | $765,334 | $799,167 |
| All Other Compensation ($) | $57,575 | $57,176 | $74,335 |
| Total ($) | $1,560,972 | $1,969,189 | $3,681,684 |
Target Annual Bonus
| Metric | 2023 | 2024 |
|---|---|---|
| Target Bonus as % of Salary | 70% | 70% |
| Result/Multiplier/Payment | Plan Result 200%; Individual Multiplier 100%; Payment $765,334 | Plan Result 200%; Individual Multiplier 100%; Payment $799,167 |
Retirement Savings Contributions (reported in “All Other Compensation”)
| Contribution Type | 2023 | 2024 |
|---|---|---|
| ERIC 3% ($) | $9,900 | $10,350 |
| Company Matching Contribution ($) | $19,800 | $20,700 |
Performance Compensation
2024 Annual Cash Incentive Plan Design and Results
| Measure | Weight | Minimum (0%) | Target (100%) | Maximum (200%) | Result | Weighted Payout |
|---|---|---|---|---|---|---|
| Free Cash Flow | 40% | $600M | $680M–$735M | $770M | $977M | 80% |
| Adjusted EBITDA excl. special items | 40% | $1,450M | $1,550M–$1,650M | $1,740M | $1,914M | 80% |
| Strategic Goals | 20% | — | — | — | Achieved as described | 40% |
| Corporate Plan Result | — | — | — | — | — | 200% |
Equity Awards (Chanatry)
| Item | 2023 | 2024 |
|---|---|---|
| Grant Date | 2/16/2023 | 2/15/2024 |
| PRSUs – Threshold (#) | 4,191 | 3,083 |
| PRSUs – Target (#) | 8,382 | 6,165 |
| PRSUs – Maximum (#) | 16,764 | 12,330 |
| RSUs – Time-vested (#) | 5,588 | 4,110 |
| Grant Date Fair Value ($) | $600,012 | $650,099 |
| Retention RSUs | — | 25,000 granted 4/15/2024; vests 2/15/2026; $1,587,250 fair value |
| PRSU Metrics (3-year) | Adjusted EBITDA increase; Adjusted EPS aggregate; Relative TSR vs PRSU Peer Group | Adjusted EBITDA increase; Adjusted EPS aggregate; Relative TSR vs PRSU Peer Group |
2022 PRSU Awards (company-wide): Final payout uses 3 one-year financial targets (Adjusted EBITDA Margin/Adjusted EPS), plus 3-year Relative TSR multiplier of 120%; awards vest 5/5/2025 .
Stock Vested and Option Position (2024)
| Metric | 2024 |
|---|---|
| Shares Acquired on Vesting (#) | 71,821 |
| Value Realized on Vesting ($) | $5,646,164 |
| Options Exercisable (#) | 31,202 |
| Option Exercise Price ($/sh) | $22.60 |
| Option Expiration | 4/16/2028 |
Equity Ownership & Alignment
Beneficial Ownership (as of March 25, 2024)
| Item | Value |
|---|---|
| Shares of Common Stock Beneficially Owned (#) | 137,607 |
| Deferred Share Units (#) | 52,700 |
| Total Units Equivalent (#) | 190,307 |
| Ownership % of Shares Outstanding | <1% |
| Shares Pledged | None; pledging prohibited by policy |
Outstanding Equity Awards (as of 12/31/2024)
| Metric | Value |
|---|---|
| Unvested RSUs (#) | 40,910 |
| Market Value of Unvested RSUs ($) | $4,474,327 |
| Unearned PRSUs (#) | 23,864 |
| Market/Payout Value of Unearned PRSUs ($) | $2,610,006 |
| Options Exercisable (#) | 31,202 |
| Option Exercise Price ($/sh) | $22.60 |
| Option Expiration | 4/16/2028 |
Ownership Guidelines, Hedging/Pledging
- Stock ownership guidelines: Messrs. Plant, Giacobbe, Marchuk, and Chanatry have met the requirements; executives must retain 50% of shares from vesting/exercise until guidelines are met .
- No short sales, derivatives, hedging, margin accounts, or pledging permitted for directors/officers; no dividends on unvested equity; no option repricing .
Employment Terms
Severance – Executive Severance Plan (No Cause Termination)
| Item | 12/31/2023 | 12/31/2024 |
|---|---|---|
| Cash Severance Payment ($) | $550,000 | $575,000 |
| Additional Retirement Accrual ($) | $28,050 | $29,325 |
| Continued Health Care Benefits ($) | $300 | $300 |
- Plan terms: For Chanatry, one year of base salary cash severance; one year of continued healthcare; one year of additional retirement accrual, subject to release .
Change-in-Control (CIC) Economics (Double Trigger)
| Item | 12/31/2024 (CIC + Qualifying Termination) |
|---|---|
| Cash Severance Payment ($) | $1,466,250 |
| Value of Additional Retirement Accrual ($) | $95,738 |
| Continued Health Care Benefits ($) | $459 |
| Prorated Annual Incentive ($) | $399,583 |
| Value of Equity Awards Vesting ($) | $9,550,320 (valued using $109.37 stock price on 12/31/2024; 2022 PRSUs at 191% achievement, 2023/2024 PRSUs at target) |
- CIC plan terms: 1.5x salary + target bonus for Chanatry; 1.5 years health benefits; 1.5 years savings plan contributions; 6 months outplacement; prorated annual incentive; no excise tax gross-up; unvested equity does not immediately vest at CIC unless no replacement award; replacement awards vest on termination without cause/for good reason within 2 years post-CIC; PRSUs convert to time-vested per performance-period completion rules .
Severance Governance
- Board policy caps cash severance over 2.99x salary + target bonus absent shareholder approval (adopted Feb 2024) .
- Clawback policy in place .
Deferred Compensation (Chanatry)
| Metric | 2023 | 2024 |
|---|---|---|
| Executive Contributions ($) | $382,727 | $122,008 |
| Registrant Contributions ($) | $27,476 | $43,285 |
| Aggregate Earnings ($) | $729,722 | $2,138,651 |
| Dividends ($) | $8,193 | $9,416 |
| Aggregate Balance at FYE ($) | $3,080,585 | $5,393,945 |
Performance & Track Record (Company Context)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Company TSR – $100 Initial Investment (value) | 167.93 | 231.48 | 469.20 |
| Net Income ($M) | 469 | 765 | 1,155 |
| Adjusted EBITDA excl. special items ($M) | 1,276 | 1,508 | 1,914 |
- 2024 corporate IC plan paid the maximum 200% given performance exceeded maximum thresholds for both Adjusted EBITDA and Free Cash Flow and strategic goals were achieved .
Compensation Committee Analysis
| Year | Chair | Members |
|---|---|---|
| 2024 | Robert F. Leduc | James F. Albaugh; Joseph S. Cantie |
| 2025 | James F. Albaugh | David J. Miller; Jody G. Miller |
- Program emphasizes pay-for-performance, robust stock ownership guidelines, double-trigger CIC, independent consultant, no hedging/pledging, and severance caps .
Investment Implications
- Strong alignment: Chanatry’s pay is leveraged to Adjusted EBITDA, Free Cash Flow, and multi-year PRSU metrics including relative TSR—supporting pay-for-performance and shareholder value creation .
- Upcoming vesting/supply dynamics: Significant vesting occurred in 2024 (71,821 shares, $5.65M value), and a 25,000 retention RSU grant vests on February 15, 2026, potentially adding share supply near that date; options exercisable total 31,202 at a $22.60 strike expiring in 2028 .
- Retention/transition signals: The 2024 retention RSU award (25,000) was explicitly to retain Chanatry into 2026 and support a smooth transition, reducing near-term departure risk but indicating retirement planning over the medium term .
- Governance risk mitigants: No excise tax gross-up, double-trigger CIC, no hedging/pledging, severance capped at 2.99x without shareholder approval—limiting shareholder-unfriendly outcomes and reducing compensation-related red flags .