Craig Gates
About Craig D. Gates
Craig D. Gates, age 66, is an independent director nominee who has served on Key Tronic’s board since July 2009 and was the company’s President and CEO from April 2009 through June 2024. He holds a B.S. in Mechanical Engineering and an MBA from the University of Illinois, Urbana. His prior experience spans engineering and operations leadership at Honeywell’s Microswitch Division before joining Key Tronic in 1994, progressing through VP roles to CEO. The board cites his business expertise, senior management experience, and education as qualifications for board service .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Key Tronic Corporation | President & CEO | Apr 2009 – Jun 2024 | Led company strategy and operations; subsequently transitioned to director role |
| Key Tronic Corporation | EVP, Marketing, Engineering, Sales | Jul 1997 – Apr 2009 | Senior leadership across commercial and technical functions |
| Key Tronic Corporation | VP & GM, New Business Development | Oct 1995 – Jul 1997 | Growth initiatives and new business development |
| Key Tronic Corporation | VP of Engineering | Oct 1994 – Oct 1995 | Engineering leadership |
| Honeywell Inc., Microswitch Division | Director of Operations, Electronics | 1991 – Oct 1994 | Operations leadership |
| Honeywell Inc., Microswitch Division | Engineering & Management Positions | 1982 – 1991 | Progressive engineering/management roles |
External Roles
- The 2025 proxy biography for Mr. Gates does not list other public company directorships or external board roles .
Board Governance
- Independence: The board determined all directors are independent except Mr. Gates (former CEO) and Mr. Larsen (current CEO) under Nasdaq rules .
- Committee assignments: Mr. Gates is not listed as a member of the Audit, Compensation and Administration, or Governance and Nominating Committees (current compositions exclude him) .
- Attendance: In FY2025, the board met 7 times; each director attended at least 85% of board meetings and at least 84% of their committee meetings .
- Executive sessions: Independent directors met in executive session at 2 of 5 board meetings in FY2025 .
- Board leadership: Roles of Chair and CEO are separated; Mr. Klawitter is Chair (since Jan 2024) .
Fixed Compensation
| Component | Amount/Detail | Notes |
|---|---|---|
| Fees Earned (FY2025) | $60,750 | Gates’ FY2025 cash director fees per non-employee director compensation table |
| Annual Cash Retainer (Policy) | $81,000 (board member); $97,200 (Chair) | Policy-level retainers; 10% voluntary temporary reduction effective May 18, 2025 |
| Consulting Agreement | $10,000 per month; term Jun 30, 2024 – Jun 30, 2026 | Related-person transaction reviewed under policy; disclosed as “All Other Compensation” ($120,000 in FY2025) |
Performance Compensation
| Equity Award | Grant Date | Structure | Units/Value | Vesting |
|---|---|---|---|---|
| RSUs (non-employee director grant) | Sep 3, 2024 | Director equity under 2010 Plan | 8,869 RSUs; $40,000 grant-date fair value | Vests on first anniversary of grant |
| RSUs (non-employee director grant) | Aug 21, 2025 | Director equity under 2024 Plan | 14,388 RSUs (per non-employee director) | Vests on first anniversary of grant |
- Director equity grants vest time-based; no performance metrics disclosed for director RSUs. The Compensation Committee replaced SARs with RSUs beginning FY2025 for executives and directors to align structure; executive RSU performance tranches reference EBITDA thresholds, but non-employee director RSUs are time-vested .
Other Directorships & Interlocks
- No other public company directorships or disclosed interlocks for Mr. Gates are listed in his 2025 proxy biography .
Expertise & Qualifications
- Education: B.S., Mechanical Engineering; MBA, University of Illinois, Urbana .
- Domain expertise: Manufacturing operations, engineering, and executive leadership in EMS/industrial electronics; former CEO of Key Tronic .
- Board-identified qualifications: Business expertise, senior management experience, education .
Equity Ownership
| Metric | Value |
|---|---|
| Beneficial Ownership (Record Date: Sep 9, 2025) | 315,570 shares (2.9% of outstanding 10,773,774 shares) |
| Outstanding Director RSUs as of Jun 28, 2025 | 8,869 units |
| Hedging/Pledging | Company policy prohibits hedging, short sales, derivative trading, and pledging or margining Company stock by directors, officers, employees and covered persons |
Say-on-Pay & Shareholder Feedback
| Item | For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|---|
| 2025 Say-on-Pay (Proposal 2) | 3,989,198 | 1,650,517 | 47,791 | 2,101,544 |
| Director Election (2025) | For | Withheld | Broker Non-Votes |
|---|---|---|---|
| Craig D. Gates | 4,092,839 | 1,594,667 | 2,101,544 |
| Context: Beranek | 5,014,299 | 673,207 | 2,101,544 |
| Context: Larsen | 5,297,478 | 390,028 | 2,101,544 |
- Shareholders provided lower “For” votes for Mr. Gates relative to some peers (e.g., Beranek, Larsen) in the 2025 director election, which investors may view as a signal to monitor independence or perceived conflicts .
Related-Party Transactions (Conflict Review)
- Consulting Agreement: Mr. Gates provides consulting services post-retirement; term Jun 30, 2024 – Jun 30, 2026; compensation $10,000 per month. The company’s Related Person Transactions policy assigns Audit Committee responsibility for review/approval to ensure terms no less favorable than for unaffiliated parties. No other related-party transactions requiring disclosure in FY2025 were reported .
Compensation Structure Analysis (Director)
- Mix (FY2025 actual): $60,750 cash fees + $40,000 RSUs + $120,000 consulting payments (total $220,750), with equity time-vested and consulting paid monthly .
- Structural changes: Company ceased SARs and adopted RSUs as the primary long-term equity starting FY2025 for executives and directors; director RSUs vest on first anniversary (time-based) .
- Governance safeguards: Compensation Committee uses independent consultants (TCS and Milliman) for executive and director pay; neither provided other services in FY2025 .
Employment & Contracts
- Director status: Non-employee director; not independent under Nasdaq rules (former CEO) .
- Consulting Agreement: Standalone agreement filed as an exhibit; consistent with proxy disclosure of $10,000/month and specified term .
Performance & Track Record (Company context during his leadership)
- Disclosure notes leadership transition: Mr. Gates served as CEO through FY2024; pay-versus-performance table identifies CEO changes and reports TSR and net income for context (e.g., value of a fixed $100 investment: $132.79 in 2023, $94.85 in 2024, $63.93 in 2025; net income/loss in those years) .
Governance Assessment
-
Strengths:
- Clear prohibition on hedging/pledging and margining by directors; strong insider trading controls .
- Separation of Chair/CEO roles and active committee oversight of risk; independent compensation consultants engaged with no other services in FY2025 .
- Attendance thresholds met by all directors in FY2025; structured committee charters publicly available .
-
Watch items / RED FLAGS:
- Non-independent director with concurrent paid consulting arrangement ($10,000/month, FY2025 All Other Comp of $120,000), even though reviewed under related-party policy and disclosed; investors may monitor for potential influence or information asymmetry .
- Lower relative shareholder support for his 2025 re-election versus certain peers (Gates 4,092,839 “For” vs. Beranek 5,014,299; Larsen 5,297,478); could signal governance/independence concerns among some holders .
- Long tenure (director since 2009) may raise independence perception questions, though tenure alone does not determine independence under Nasdaq rules .
-
Neutral context:
- Mr. Gates holds meaningful equity (315,570 shares; 2.9%); plus outstanding director RSUs of 8,869 as of FY2025 year-end, aligning incentives. Pledging/hedging is prohibited by policy .
- Not serving on any standing committee, which limits direct influence over audit, compensation, or nominations while consulting relationship is in effect .
Notes:
- All facts and figures are taken directly from: 2025 DEF 14A (filed Sep 16, 2025), FY2025 Form 10-K exhibits, and Oct 23, 2025 Annual Meeting 8‑K results.
Citations: **[719733_0000719733-25-000090_ktcc-20250916.htm:3]** **[719733_0000719733-25-000090_ktcc-20250916.htm:4]** **[719733_0000719733-25-000090_ktcc-20250916.htm:6]** **[719733_0000719733-25-000090_ktcc-20250916.htm:7]** **[719733_0000719733-25-000090_ktcc-20250916.htm:8]** **[719733_0000719733-25-000090_ktcc-20250916.htm:9]** **[719733_0000719733-25-000090_ktcc-20250916.htm:10]** **[719733_0000719733-25-000090_ktcc-20250916.htm:11]** **[719733_0000719733-25-000090_ktcc-20250916.htm:12]** **[719733_0000719733-25-000090_ktcc-20250916.htm:14]** **[719733_0000719733-25-000090_ktcc-20250916.htm:20]** **[719733_0000719733-25-000090_ktcc-20250916.htm:21]** **[719733_0000719733-25-000086_ktcc-20250628.htm:87]** **[719733_0000719733-25-000096_ktcc-20251023.htm:1]**.