Richard T. Wagner
About Richard T. Wagner
Richard T. “Rick” Wagner (age 65) is Senior Vice President and Chief Operating Officer of Insteel Industries (IIIN), a role he has held since 2020; he joined Insteel in 1992, previously leading the Concrete Reinforcing Products business since 1998 and serving as a Vice President since 2007. He began his career at Florida Wire & Cable (1977–1992) and holds a B.B.A. from the University of North Florida . Company performance in FY2024 reflected cyclical headwinds: revenue declined 18.5% to $529.2M, net earnings were $19.3M, and Return on Capital was 6.3% (driving below-target annual incentives); liquidity remained strong with $111.5M cash, a special $1.00 dividend, and the EWP acquisition to bolster Midwest presence and synergies . Say-on-pay support was strong (94% in 2024), and the annual incentive remains tightly linked to Return on Capital economics .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Insteel Industries / Insteel Wire Products | SVP & COO | 2020–Present | Enterprise operations leadership through cyclical downturn; execution against ROC-driven incentive structure |
| Insteel Wire Products | VP & GM, Concrete Reinforcing Products BU | 1998–2020 | Drove growth and cost position in welded wire reinforcement; long-tenured BU leadership |
| Insteel Industries | Vice President | 2007–Present | Corporate executive responsibility and governance of BU performance |
| Florida Wire & Cable (acquired by Insteel in 2000) | Various roles | 1977–1992 | Industry and operations foundation in PC strand/galvanized strand |
Fixed Compensation
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary | $355,385 | $370,000 | $372,885 |
| All Other Compensation | $61,754 | $42,764 | $46,680 |
| Change in Pension Value (SRP) | — | $24,701 | $189,669 |
| Total Compensation | $1,118,607 | $920,007 | $949,086 |
- Current annual base salary was increased by the Compensation Committee in July 2024 to $395,000 (target award levels otherwise unchanged) .
Performance Compensation
Annual Incentive (ROCICP)
| Item | FY 2024 Plan/Result |
|---|---|
| Performance Metric | Return on Capital (ROC) – 100% weighting |
| WACC (Target ROC) | 10.0% target; threshold 5.0%; max 15.0% |
| Actual ROC (FY2024) | 6.3% |
| Target Bonus (% of Salary) | 60% |
| Payout vs Target | 29.0% of target |
| Wagner FY2024 Target / Max / Actual | $223,731 / $447,462 / $64,882 |
Long-Term Incentives (Time-based)
- Structure: 50% RSUs (3-year cliff), 50% stock options (1/3 per year over 3 years); two grant tranches per year (Feb and Aug, post-earnings) .
| Grant | Type | Shares/Options | Exercise Price | Grant-Date FV |
|---|---|---|---|---|
| 2/13/2024 | RSUs | 1,978 | — | $68,736 |
| 2/13/2024 | Options | 5,252 | $34.75 | $68,749 |
| 8/13/2024 | RSUs | 2,152 | — | $68,735 |
| 8/13/2024 | Options | 5,313 | $31.94 | $68,750 |
| FY2024 Realizations | Amount |
|---|---|
| RSUs vested (shares / value) | 3,978 / $135,413 |
| Options exercised (shares / value) | — / — |
Equity Ownership & Alignment
| Component | Units/Value |
|---|---|
| Common Stock Owned | 42,158 shares |
| RSUs (unvested) | 12,501 units |
| Options Exercisable within 60 days | 22,925 options |
| Beneficial Ownership Total | 65,083 (excludes RSUs per SEC definition; RSUs shown separately for alignment view) |
| Ownership % of SO | ~0.33% (65,083/19,430,632 outstanding) |
| Ownership Guidelines | 1.5x base salary for NEOs; all NEOs with ≥5 years in compliance |
| Hedging/Pledging | Hedging prohibited; pledging requires prior approval; executives must disclose intent to pledge |
| Clawback | Mandatory recovery of incentive comp upon restatement (3-year lookback) |
Upcoming scheduled RSU vestings (supply monitor):
| Vest Date | Shares |
|---|---|
| 2/15/2025 | 1,784 |
| 8/15/2025 | 2,098 |
| 2/14/2026 | 2,271 |
| 8/14/2026 | 2,218 |
| 2/13/2027 | 1,978 |
| 8/13/2027 | 2,152 |
Key unexercisable option tranches (vesting/expiry pressure):
| Options (Unexercisable) | Strike | Expiration |
|---|---|---|
| 1,484 | $38.54 | 2/15/2032 |
| 1,631 | $32.77 | 8/15/2032 |
| 3,467 | $30.27 | 2/14/2033 |
| 3,444 | $30.99 | 8/14/2033 |
| 5,252 | $34.75 | 2/13/2034 |
| 5,313 | $31.94 | 8/13/2034 |
Retirement eligibility: Equity awards accelerate upon “retirement” (voluntary termination at ≥55 years and ≥10 years of service), death, disability, or qualifying CIC termination; Wagner meets age/service thresholds, implying potential acceleration risk if he retires .
Employment Terms
- Change-in-Control (double-trigger) Severance: For Wagner, 1x base salary + 1x average bonus (prior three years), 12 months of benefits, up to $15,000 outplacement; all unvested options/RSUs vest upon qualifying termination; 280G cutback; no tax gross-ups .
- Clawback: Mandatory recovery for restatements (see above) .
- No employment agreement; CEO has separate severance; others rely on CIC arrangements .
Potential payments if terminated on FY2024 year-end basis:
| Scenario (as of 9/28/2024) | Total ($) | Key Components (select) |
|---|---|---|
| Termination without Cause or for Good Reason after CIC | $2,995,723 | Salary continuation $395,000; severance $232,971; RSUs $386,031; options $2,115; benefits $29,669; outplacement $15,000; SRP PV $1,934,937 |
| Retirement | $2,323,083 | Includes RSU/option accel and SRP PV |
| Death | $2,331,109 | Includes $500,000 death benefit; SRP (death) PV |
| Disability | $2,248,613 | Disability pay PV; RSU/option accel; SRP PV |
Pension/SERP (SRP):
| Item | Value |
|---|---|
| Years of Credited Service | 31 |
| Present Value of Accumulated Benefit | $1,934,937 |
| Max Benefit Formula | 50% of 5-year highest avg base salary for 15 years after retirement (30-year service for full benefit; reduced after ≥10 years) |
Performance Compensation – Plan Design Details
| Element | Design |
|---|---|
| Pay Positioning | Target total comp near median of peer group; above-median only for above-target performance |
| Peer Group (examples) | Quanex (NX), Gibraltar (ROCK), Simpson (SSD), TimkenSteel (TMST), Apogee (APOG), Northwest Pipe (NWPX), others |
| Annual Incentive | 100% Return on Capital vs WACC; strictly formulaic, no discretionary adjustments; risk-mitigating via capital stewardship |
| LTI Mix | 50% RSUs (3-year cliff), 50% Options (3-year ratable); time-based due to business cyclicality; no repricing |
| Governance | Double-trigger CIC; robust ownership guidelines; hedging prohibited; pledging requires approval; clawback policy in place |
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay: >94% approval, supporting continuity of plan design (ROC-centric annual incentives; time-based equity LTI given cyclicality) .
Investment Implications
- Alignment and cyclicality: Wagner’s pay is highly sensitive to ROC; FY2024 payout was 29% of target on 6.3% ROC vs 10% WACC target, evidencing strong pay-for-performance tension in downcycles .
- Supply/overhang signals: Six scheduled RSU cliffs through 2027 and multiple unvested option tranches create visible vesting supply; Wagner is retirement-eligible, and awards accelerate on retirement/CIC termination, a potential catalyst for incremental share supply if a transition occurs .
- Retention vs performance balance: Significant SRP value ($1.93M PV), double-trigger CIC protection (1x salary+bonus), and robust ownership guidelines support retention but LTI is time-based rather than performance-vested, shifting variable leverage toward the annual ROC plan in volatile markets .
- Governance quality: No option repricing, no tax gross-ups, hedging ban, and strong say-on-pay results reduce governance red flags; pledging requires approval and disclosure, lowering alignment risk from collateralization .