John Anderson
KnowlesAbout John Anderson
John S. Anderson (age 61) serves as Senior Vice President & Chief Financial Officer of Knowles, a role he has held since December 2013, giving him over 11 years of tenure in the CFO position . Knowles’ pay-for-performance framework ties Mr. Anderson’s incentives to annual EBIT margin, revenue, and free cash flow margin plus multi-year relative TSR PSUs; the company’s 2024 pay-versus-performance table shows net income of $23.4MM and adjusted free cash flow margin of 16.9%, with a $100 TSR investment at $94.23 vs $213.20 for the peer group . In 2024, annual bonuses for NEOs paid at 68.8% of target, and 2022 PSUs paid out at 100% of target based on a 53rd percentile r-TSR but capped due to negative TSR, underscoring alignment of equity outcomes to long-term shareholder returns .
Past Roles
No prior roles beyond Knowles’ executive listing were disclosed in the reviewed filings for Mr. Anderson; current executive roles are shown below for context .
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Knowles Corporation | SVP & Chief Financial Officer | Since Dec 2013 | Oversees capital deployment, corporate development and shareholder engagement objectives tied to annual incentives |
External Roles
No external board or public company roles for Mr. Anderson were disclosed in the filings reviewed .
Fixed Compensation
Base salary and annual incentive targets (unchanged in 2024; Anderson’s target increased to 75% in 2023):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $446,539 | $450,000 | $450,000 |
| Target Bonus (% of Salary) | 70% | 75% | 75% |
| Target Bonus ($) | $315,000 | $337,500 | $337,500 |
| Note | — | Committee raised Anderson’s target % to 75% in 2023 | No NEO base salary increases in 2024 |
Multi-year reported compensation (Summary Compensation Table):
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $446,539 | $450,000 | $450,000 |
| Stock Awards (RSUs/PSUs grant-date fair value) | $1,449,185 | $1,662,953 | $1,584,837 |
| Non-Equity Incentive Plan Comp | $63,000 | $202,500 | $232,200 |
| Change in Pension Value & Nonqualified DC Earnings | — | $500 | $2,500 |
| All Other Compensation | $15,250 | $20,795 | $21,545 |
| Total | $1,973,974 | $2,336,748 | $2,291,082 |
Performance Compensation
Annual Incentive Plan (AIP) structure and 2024 outcomes for Anderson:
| Component | Weighting | Performance Metrics | Target | Actual/Payout | Payout ($) | Vesting/Timing |
|---|---|---|---|---|---|---|
| Financial Component | 80% | Adjusted EBIT Margin (35%), Revenue (35%), FCF Margin (30), BU weights MSA 29.167%, PD 29.167%, CD 29.167%, CMM 12.5% | 100% of component | 56.0% corporate weighted performance → 56% payout | $151,200 (337,500 × 80% × 56%) | Annual cash bonus for FY2024 |
| Individual Strategic Objectives | 20% | Corporate development (7%), Capital deployment (7%), Shareholder engagement (6%) | Rating scale Target=100% | “Between Target and Exceeded” → 120% payout | $81,000 (337,500 × 20% × 120%) | Annual cash bonus for FY2024 |
| Total AIP | — | — | $337,500 target | 68.8% of target | $232,200 | Paid based on FY2024 performance |
Long-Term Incentive Plan (LTIP) design and 2024 grants:
| Element | 2024 Target Value | Mix | Key Terms | Status/Payout |
|---|---|---|---|---|
| RSUs | $650,000 | 50% of LTI | Multi-year vesting; 2024 grants vest ratably over 3 years beginning Feb 20, 2025; some prior awards vest Feb 6, 2025 and Feb 6, 2026 | Outstanding/vesting per schedule |
| PSUs (3-year r-TSR) | $650,000 | 50% of LTI | Payout ranges: 0% (<25th pct), 25% (25th), 100% (50th), 225% (≥75th); negative absolute TSR caps payout at 100%; 1-year holding post-settlement; max value cap at 5× target×grant price | 2022 cycle paid 100% at 53rd percentile (capped due to negative TSR) → Anderson earned 28,382 shares on Feb 1, 2025 |
Stock vested and options exercised in 2024 (liquidity/pressure signals):
| Activity | 2024 Quantity | 2024 Value |
|---|---|---|
| Options exercised | 86,575 shares | $349,733 realized |
| Stock awards vested | 49,945 shares, incl. 4,045 deferred RSUs and 5,261 deferred PSUs to Jan 31, 2026 | $824,996 realized |
Equity Ownership & Alignment
Beneficial ownership and alignment policies:
| Item | Detail |
|---|---|
| Shares beneficially owned | 217,022 shares (<1%); includes 42,017 options currently exercisable; also includes 12,137 vested RSUs and 5,261 earned PSUs deferred to Jan 31, 2026 |
| Ownership guidelines | Executives must hold ≥2× base salary; Anderson in compliance as of Dec 31, 2024 |
| Hedging/pledging | Prohibited for directors/executives; short sales and pledging disallowed |
| Outstanding awards at 12/31/24 | Options: 42,017 exercisable @ $16.77 expiring 02/09/2027; RSUs unvested: 9,461; 22,700; 38,806; PSUs: 28,382 (2022 cycle—earned Feb 1, 2025), plus 34,049 and 38,806 unearned for later cycles |
| Valuation basis | Market values based on $19.93 closing price at 12/31/24 |
Focused outstanding award details (Anderson):
| Award Type | Quantity | Price/Terms | Vesting/Expiration | Market/Payout Value Basis |
|---|---|---|---|---|
| Options (exercisable) | 42,017 | $16.77 | Expire 02/09/2027 | — |
| RSUs (unvested) | 9,461; 22,700; 38,806 | — | Footnotes (2)-(4): Feb 7, 2025; Feb 6, 2025 and Feb 6, 2026; ratably over 3 years from Feb 20, 2025 | $188,558; $452,411; $773,404 at $19.93 |
| PSUs (2022 cycle) | 28,382 | r-TSR | Earned Feb 1, 2025 at 100% due to 53rd percentile; negative TSR capped at 100% | $1,272,720 market/payout value disclosure context |
| PSUs (later cycles) | 34,049; 38,806 | r-TSR | Performance period ongoing | $1,526,842; $1,740,158 at $19.93 |
Employment Terms
Knowles utilizes standardized executive plans (no individual employment contracts), with severance and CIC provisions:
| Scenario | Cash Severance | Equity Treatment | Health/COBRA | Total (as of 12/31/24) |
|---|---|---|---|---|
| Involuntary (not for cause) | $787,500 (12 months salary + pro rata target bonus) | Unvested RSUs/PSUs forfeited | $22,063 | $809,563 |
| Retirement | — | RSUs/PSUs continue to vest per original schedule; retirement defined as age ≥62 and ≥5 years service | — | $2,866,372 (RSUs $1,414,372; PSUs $1,452,000) |
| Death/Disability | — | RSUs accelerate; PSUs accelerate pro rata | — | $2,066,350 (RSUs $1,414,372; PSUs $651,978) |
| CIC only (single-trigger) | None | None | None | — |
| CIC + Involuntary (double-trigger, within specified window) | $1,575,000 (2.0× salary+target bonus, lump sum; best-net treatment, no excise tax gross-ups) | RSUs/PSUs accelerate/settle per plan within ~60 days | Lump-sum 12 months COBRA costs | $4,463,435 (incl. equity) |
Additional governance protections: robust clawback policy (restatements/misconduct; up to 36 months; SEC/NYSE compliant) ; prohibition on hedging/short sales/pledging .
Performance & Track Record
- 2024 results and incentives: NEO bonuses at 68.8% of target; corporate financial weighted performance at 56.0%; underscores discipline when goals are not met .
- TSR and financials context (Pay vs Performance): Company TSR value of $94.23 (vs peer group $213.20), Net Income $23.4MM, Adjusted FCF Margin 16.9% for 2024; prior years show volatility (2023 Net Income $72.4MM; 2022 $(430.1)MM) reflecting portfolio transition and market cycles .
- Strategic initiatives: Integration of Cornell Dubilier (CD) to expand capacitors portfolio; sale of CMM in Dec 2024 with AIP BU reweighting; PD segment faced inventory/production challenges, implying execution risk to margin/FCF targets .
Compensation Committee Analysis
- Independent advisor: Compensia serves as the committee’s consultant; independence reviewed; scope includes peer group, incentive design, CEO pay analysis .
- Peer group: ADTRAN, Bel Fuse, Cohu, CTS, Digi International, Extreme Networks, FormFactor, MACOM, MaxLinear, Mercury Systems, Methode Electronics, NetScout, OSI Systems, Power Integrations, Ribbon Communications, Rogers, Semtech, Veeco, Viavi; target pay references peer median .
- Governance highlights: Double-trigger CIC vesting; no tax gross-ups; no employment contracts; multi-year vesting; stock ownership guidelines; clawback; prohibition of hedging/pledging; annual say-on-pay .
- Say-on-pay: ~98% approval at 2024 annual meeting for 2023 compensation .
Investment Implications
- Alignment: Anderson’s pay mix skews to at-risk and equity, with annual cash tied to EBIT margin/revenue/FCF and long-term PSUs tied to r-TSR, supporting shareholder alignment; hedging/pledging prohibitions and stock ownership compliance (≥2× salary) reduce misalignment risk .
- Near-term supply/demand for shares: 2024 exercises (86,575 options) and 2024 vesting (49,945 shares) created liquidity; however, a portion of vested shares is deferred until Jan 31, 2026, moderating near-term selling pressure .
- Retention/transaction risk: No individual employment contract; severance provides 1.0× salary + pro rata bonus; CIC double-trigger at 2.0× with equity acceleration is standard market protection—adequate retention but limited entrenchment; absence of excise gross-ups is shareholder-friendly .
- Execution watchpoints: PD segment’s operational and inventory challenges and negative TSR cap on PSU 2022 payout highlight sensitivity of incentives to operational execution and market returns; monitor BU-level metrics and AIP framework for 2025 to gauge bonus leverage .
- Governance signal: Strong say-on-pay support (~98%) and independent consultant oversight suggest low compensation-related governance risk, reducing headline risk for shareholders .