Jeffrey Niew
KnowlesAbout Jeffrey Niew
Jeffrey Niew is President & CEO of Knowles and a director; age 58, director since February 2014, CEO since 2013 with over two decades in management roles at Knowles and prior senior roles at Dover Communication Technologies, Littelfuse, and Hewlett-Packard . Under the SEC Pay-versus-Performance framework, Knowles’ CEO “compensation actually paid” tracked stock performance and the company-selected performance measure (Adjusted Free Cash Flow margin), with Knowles TSR-based $100 investment values of $87.14 (2020), $110.40 (2021), $77.64 (2022), $84.68 (2023), and $94.23 (2024), and AFcf margin of 12.6%, 15.4%, 7.1%, 15.0%, and 16.9% respectively . The company’s long-term incentives rely exclusively on a three-year relative TSR PSU design (vs Russell 2000), with a one-year holding period post-settlement; 2022 PSU awards paid 100% of target at a 53rd percentile r-TSR but were capped at target due to negative absolute TSR . Governance mitigants include an independent Chair, no hedging/pledging by insiders, robust clawback, and CEO stock ownership guideline of 4x salary .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Knowles (Knowles Electronics LLC/Knowles Corp.) | COO (2007), President (2008), President & CEO (2010; CEO since 2013 at Knowles Corp.) | 2007–present | Deep operating/market expertise; executive leadership over product, markets, capital allocation, and succession planning |
| Dover Corporation / Dover Communication Technologies | VP, President & CEO of Dover Communication Technologies | 2011–Feb 2014 | Led Dover’s communication technologies segment prior to Knowles spin-out era |
| Littelfuse | Product management, sales, engineering (Electronic Products group) | 1995–2000 | Commercial and engineering leadership in electronic products |
| Hewlett-Packard | Engineering and product management (Optoelectronics Group) | 1988–1994 | Early technical and product management foundation |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Commercial Vehicle Group (CVG) | Director | Since 2024 | Public company directorship |
| Syntiant Corp. | Director | Since 2024 | Private semiconductor/AI edge company board |
| University of Illinois College of Engineering | Advisory Board, Chairman & member | N/A | Academic advisory leadership |
| Advanced Diamond Technologies | Director (prior) | N/A | Prior public/private board experience |
Fixed Compensation
2024 Target Compensation Mix (at grant/plan targets)
| Element | Amount |
|---|---|
| Base salary | $750,000 |
| Target annual incentive | $900,000 |
| Long-term incentive grant value | $4,400,000 |
| Total target compensation | $6,050,000 |
Note: In 2024, 88% of Niew’s total direct compensation (TDC) was at risk/variable and 73% was equity-based, aligning to shareholder outcomes .
Summary Compensation (Reported)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 717,789 | 747,596 | 750,000 |
| Stock awards ($) | 4,545,197 | 5,097,770 | 5,460,476 |
| Non-equity incentive ($) | 174,000 | 540,000 | 583,200 |
| Change in pension value ($) | — | 2,800 | 47,500 |
| All other compensation ($) | 21,629 | 23,408 | 24,695 |
| Total ($) | 5,458,615 | 6,411,574 | 6,865,871 |
Performance Compensation
Annual Incentive Plan (AIP) – 2024 outcomes
- Niew’s individual strategic objectives (total 20% weight): Corporate development initiatives (15%), Strategic growth initiatives (5%); individual component paid at 100% of target ($180,000) .
- Total AIP payout: $583,200, comprising $403,200 financial component and $180,000 individual component; 64.8% of target .
| Component | Weight | Target ($) | Payout % | Payout ($) |
|---|---|---|---|---|
| Financial metrics | N/A | — | — | 403,200 |
| Individual objectives | 20% | 900,000 × 20% | 100% | 180,000 |
| Total | — | 900,000 | 64.8% | 583,200 |
Long-Term Incentive Plan (PSUs and RSUs)
- LTI form: PSUs (r-TSR vs Russell 2000; 3-year performance) + RSUs; company currently does not grant stock options to employees .
- PSU payout schedule (r-TSR percentile vs Russell 2000): 25th=25%, 50th=100%, 75th+=225%; negative absolute TSR caps payout at 100%; one-year holding period post-settlement; PSU value capped at 5× target shares × grant-date price .
| r-TSR Percentile | PSU Payout % |
|---|---|
| 75th or higher | 225% |
| 50th | 100% |
| 25th | 25% |
| Below 25th | 0% |
- 2022 PSU payout: r-TSR 53rd percentile; paid 100% due to negative TSR cap. Niew earned 96,263 shares .
| Executive | PSUs Granted (2022) | Payout % | Payout Shares |
|---|---|---|---|
| Jeffrey Niew | 96,263 | 100.0% | 96,263 |
Outstanding and Vesting Schedules (as of 12/31/2024)
| Instrument | Quantity | Key terms |
|---|---|---|
| Stock options (exercisable) | 136,656 @ $16.07 exp. 2/19/2026; 142,857 @ $16.77 exp. 2/9/2027 | December 31, 2024 close $19.93 (for reference in award valuation) |
| RSUs (unvested) | 26,254; 61,289; 118,209 | Footnotes: award on 2/7/25 fully vested; 2/6/25 (half) and 2/6/26 (half); and ratable in 3 annual installments starting 2/20/25 |
| PSUs (unearned/unvested) | 96,263; 112,362; 144,478 | 2022 PSU vested 2/1/25 at 100%; later cycles still in performance |
Vesting events in early 2025 (2/1, 2/6, 2/7, 2/20) could create episodic liquidity windows and potential selling pressure around settlement dates; hedging/pledging remains prohibited .
Equity Ownership & Alignment
| Measure | Value |
|---|---|
| Beneficial ownership (shares) | 1,001,471 (1.14% of 87,689,673 outstanding) |
| Options exercisable within 60 days | 279,513 (included in ownership per SEC rules) |
| Policy restrictions | No hedging, short sales, or pledging by directors or executive officers |
| Ownership guidelines | CEO 4x base salary |
Notes: Ownership table as of March 7, 2025; includes options exercisable and RSUs vesting within 60 days as defined .
Employment Terms
Knowles uses standardized Severance and CIC Severance Plans (no individual employment contracts). CIC severance is double-trigger; no excise tax gross-ups (“best net” approach). Under involuntary termination (without cause), payout equals 12 months’ salary continuation plus pro rata target bonus and 12 months COBRA; under CIC double-trigger, payout equals 2.0× (salary + target bonus) plus 12 months COBRA; equity acceleration varies by RSU/PSU type and scenario; retirement definition requires age ≥62 with ≥5 years of service .
Estimated Payments for Niew at 12/31/2024
| Scenario | Cash Severance ($) | RSUs ($) | PSUs ($) | Health/Welfare ($) | Total ($) |
|---|---|---|---|---|---|
| Involuntary not for cause | 1,650,000 | — | — | 15,548 | 1,665,548 |
| Retirement | — | 4,100,637 | 5,118,821 | — | 9,219,458 |
| Death/Disability | — | 4,100,637 | 2,245,576 | — | 6,346,213 |
| CIC Double-trigger | 3,300,000 | 4,100,637 | 5,118,821 | 15,548 | 12,535,006 |
Performance & Track Record
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Value of $100 invested – Knowles TSR ($) | 87.14 | 110.40 | 77.64 | 84.68 | 94.23 |
| Value of $100 invested – Peer Group TSR ($) | 120.75 | 151.36 | 124.87 | 159.56 | 213.20 |
| Net Income ($MM) | 6.6 | 150.4 | (430.1) | 72.4 | 23.4 |
| Company-selected measure: Adjusted Free Cash Flow Margin (%) | 12.6 | 15.4 | 7.1 | 15.0 | 16.9 |
Strategic context: 2024 divestiture of the CMM business and integration of Cornell Dubilier (acquired November 2, 2023) reshaped portfolio and headcount, consistent with strategy to in-source manufacturing in Asia; CMM results reclassified as discontinued operations in comp highlights .
Board Governance
- Director since February 2014; not independent by virtue of CEO role .
- Board leadership: Independent Chairman; majority independent board; all committees (Audit, Compensation, Governance/Nominating) comprised of independent directors .
- Committee roles: As CEO/director, Niew does not serve on board committees (N/A) .
- Dual-role implications: CEO + Director structure mitigated by independent Chair, independent committees, and annual say-on-pay; board affirms governance standards and independence determinations annually .
Director Compensation (context)
- The proxy seeks an annual advisory say-on-pay vote; board recommends FOR, citing balance of performance alignment and retention; specific vote outcomes not disclosed in the excerpts above .
Compensation Structure Analysis
- High at-risk and equity-based mix (88% at-risk; 73% equity-based for CEO in 2024) signals strong alignment with shareholder outcomes; realizable pay varies with stock performance (e.g., 2024 grant price $16.75 vs 12/31/24 price $19.93) .
- LTI shifts toward PSUs/RSUs and away from options (company indicates no current employee option grants), reducing risk and enhancing retention via multi-year vesting and TSR linkage .
- AIP payouts flexed down when financial performance underwhelmed (CEO at 64.8% of target), showing responsiveness to annual results; individual component sized at 20% and paid at target for CEO .
Risk Indicators & Red Flags
- No hedging/pledging permitted; robust clawback policy; double-trigger CIC; no excise tax gross-ups (best-net cutback) .
- Equity award vesting/settlement clustered in early February (2/1, 2/6–2/7, 2/20), which can concentrate potential insider selling windows; company notes no timing of awards around MNPI and no options repricing without shareholder approval .
Equity Ownership & Alignment (Detail)
| Category | Detail |
|---|---|
| Beneficial ownership (3/7/2025) | 1,001,471 shares (1.14%); includes 279,513 options exercisable within 60 days |
| Unvested RSUs (12/31/2024) | 26,254; 61,289; 118,209; values reflect $19.93 close |
| PSUs in-cycle (12/31/2024) | 112,362; 144,478 (unearned); 96,263 2022 cycle vested 2/1/2025 at 100% |
| Options | 136,656 @ $16.07 (exp. 2/19/2026); 142,857 @ $16.77 (exp. 2/9/2027) |
| Ownership policy | CEO 4x salary; no hedging/shorting/pledging |
Employment Terms
| Topic | Term |
|---|---|
| Contracts | No individual employment contracts for NEOs |
| Severance (no-CIC) | 12 months salary continuation + pro rata target bonus + 12 months COBRA |
| CIC severance | Double-trigger; 2.0× (salary + target bonus) lump sum + 12 months COBRA; best-net excise approach |
| Equity on retirement | RSUs continue vesting on schedule; PSUs continue on schedule (per plan) |
| Equity on death/disability | RSUs full acceleration; PSUs pro rata acceleration |
| Retirement definition | Age ≥62 and ≥5 years service |
Investment Implications
- Alignment: High at-risk/equity mix, three-year r-TSR PSUs with negative TSR cap, one-year post-PSU holding period, and robust ownership/anti-hedging policies support shareholder alignment and reduce agency risk .
- Event-driven signals: Concentrated February equity settlements (PSUs and RSUs) can create episodic insider-selling windows; monitor Form 4 activity around 2/1–2/20 each year for potential trading flows .
- Retention/COC risk: Standardized severance (1× salary + pro rata bonus) and double-trigger CIC at 2× salary+bonus are market-consistent—supportive for retention without excessive payouts; no tax gross-ups .
- Performance sensitivity: 2024 AIP at 64.8% of target and 2022 PSU paying at target (despite above-median r-TSR) due to negative TSR cap demonstrate real pay-for-performance tension—upside requires durable TSR and cash flow margin improvements .
- Governance: Independent Chair and committee structure mitigates dual-role risks from CEO as director; annual say-on-pay provides ongoing external feedback on pay design .