Mark Behrman
LSB INDUSTRIESAbout Mark Behrman
Mark T. Behrman, age 62, is Chairman and Chief Executive Officer of LSB Industries (appointed Chairman in Aug-2024; CEO since Dec-30-2018). He previously served as EVP & CFO (2015–2018) and SVP Corporate Development (2014–2015); earlier he was Managing Director, Head of Investment Banking and Head of the Industrial & Energy Practices at Sterne Agee (2007–2014). He holds an MBA in Finance (Hofstra) and a BS in Accounting (Binghamton). He is Non‑Executive Chairman at PHX Minerals and a director of The Fertilizer Institute.
Under his tenure, 2024 Adjusted EBITDA was $129.5M and net loss was $19.4M; LSB’s total shareholder return (value of $100 invested at 12/31/2020) moved from $510 (2022) to $357 (2023) to $291 (2024).
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| LSB Industries | Chairman & CEO | 2024–present (CEO since 2018) | Combined Chair/CEO leadership; Board notes deep industry and financial expertise |
| LSB Industries | EVP & CFO | 2015–2018 | Led finance through turnaround period pre/early CEO tenure |
| LSB Industries | SVP Corporate Development | 2014–2015 | Corporate development leadership prior to CFO role |
| Sterne Agee, Inc. | Managing Director; Head of Investment Banking; Head of Industrial & Energy Practices | 2007–2014 | Investment banking leadership across industrial and energy sectors |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| PHX Minerals, Inc. | Non‑Executive Chairman; Audit & Compensation Committee member | 2017–present | Current public company chair and committee roles |
| The Fertilizer Institute | Director | 2019–present | Industry association board service |
| Noble International Ltd. | Director; Audit Committee Chair | 1998–2007 | Prior public company board; audit chair 1998–2003 |
| Oakmont Acquisition Corp. | Director | 2005–2007 | SPAC board |
| Robocom Systems International | Director | 1998–2000 | Software company board |
Fixed Compensation
- Base salary increased from $747,000 (2024) to $800,000 effective Mar-29-2025. Target annual cash bonus is 110% of salary (range 0%–200%) per program/contract. 2024 actual bonus paid: $501,000.
- Employment agreement provides minimum base salary of at least $650,000 and target bonus of at least 100% of base (range 0%–200%). Non‑compete and non‑solicit post‑termination for 24 months.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 669,000 | 711,815 | 741,080 |
| Stock awards – grant date FV ($) | 2,089,578 | 3,146,428 | 3,083,451 |
| Non‑equity incentive (STI) ($) | 926,120 | 603,000 | 501,000 |
| All other comp ($) | 12,815 | 13,405 | 18,573 |
| Total comp ($) | 3,697,513 | 4,474,648 | 4,344,104 |
Perquisites: 2024 “all other compensation” included auto allowance, club dues, spouse airfare and meals.
Performance Compensation
Short‑Term Incentive Plan (STI) structure and 2024 outcomes:
- Metrics and weights: Environmental, Health & Safety (25%); Adjusted EBITDA (50%); Ammonia production rate (25%).
- 2024 achievements and payouts (CEO): EHS weighted payout 4%; Adjusted EBITDA weighted payout 48%; Ammonia production below threshold (0%); overall payout 61% of target, resulting in $501,000.
| Metric | Weight | Target | Actual/Outcome | Payout contribution |
|---|---|---|---|---|
| EHS (TRIR, Tier I PSI, reportable environmental events) | 25% | Company goals | Achievement 17.0% of max; weighted 4.2% | 4% |
| Adjusted EBITDA | 50% | Budget | 97.0% achievement; weighted 48.4% | 48% |
| NH3 production | 25% | Budget | Below threshold | 0% |
| Overall | — | — | Committee multiplier applied within 1.01–1.26 range | 61% of target; $501,000 |
Long‑Term Incentive (LTI) design and grants:
- Mix: 50% time‑based RSUs (vest ratably over 3 years); 50% PSUs (3‑year performance period). 2024 PSU metric is relative TSR vs a fertilizer/chemicals peer set; payout range 50%–200% (capped at target if 3‑yr TSR is negative). No stock options outstanding.
| Grant date | Award type | Units | Vesting schedule | Valuation/notes |
|---|---|---|---|---|
| 1/17/2024 | Time‑based RSUs | 157,802 | 1/3 on each 1/17/2025, 1/17/2026, 1/17/2027 | Valued at $7.69 on 1/16/2024 (for time‑based); grant-date FV total $3,083,451 (incl. PSUs) |
| 1/17/2024 | PSUs (relative TSR) | 157,802 (at target) | Cliff vest after 3‑yr period ending 1/17/2027; annual measurement with 3‑yr cumulative adjustment | Monte Carlo at $11.85/share; 50%–200% payout; cap at target if 3‑yr TSR negative |
| 1/25/2023 | Time‑based RSUs | 63,642 | 1/3 annually through 1/25/2026 | — |
| 1/25/2023 | PSUs (relative TSR) | 95,462 (target) | Cliff vest 1/25/2026; annual measurement with 3‑yr cumulative adjustment | — |
| 1/20/2022 | Time‑based RSUs | 29,645 | Vested eligible awards on 1/20/2025; remainder forfeited per plan | — |
| 1/20/2022 | PSUs (absolute TSR) | 29,646 (earned) | Vested 1/20/2025 (earned over 3‑yr period) | — |
Stock vested during 2024: 306,999 shares; value realized $2,350,581.
Equity Ownership & Alignment
- Beneficial ownership: 1,325,303 shares (≈1.8% of outstanding). Directors and officers as a group (15) own ~4.3%.
- Stock ownership guidelines: CEO 5× base salary; all NEOs met/exceeded guidelines as of 12/31/2024.
- Hedging/pledging: Insider Trading and Pledging/Hedging Policy prohibits holding in margin accounts, pledging, or entering derivatives on Company stock; pre‑clearance required for trades. Company uses Rule 10b5‑1 plans for trading when in possession of MNPI.
- Potential insider supply from vesting: significant RSU and potential PSU vesting events in 2025–2027 per schedules above; option overhang is zero (no options outstanding), limiting incremental sell pressure from options.
| Ownership metric | Value |
|---|---|
| Shares beneficially owned | 1,325,303 |
| % of class | 1.8% |
| CEO ownership guideline | 5× salary; in compliance (as of 12/31/2024) |
| Shares pledged | Prohibited by policy |
Employment Terms
- Contract basics: Minimum base salary $650,000; annual cash bonus 0%–200% of salary (target ≥100%). 24‑month non‑compete and non‑solicit post‑termination. Auto‑renewal one‑year terms.
- Severance (no cause/good reason): Lump sum equal to 2× (salary + target bonus) for CEO; pro‑rata bonus; 18 months COBRA contributions; time‑based RSUs vest; PSUs vest pro‑rata based on actual performance at period end.
- Change‑in‑control (double trigger): If terminated without cause or for good reason within 24 months of a CIC, CEO receives 3× (salary + target bonus), pro‑rata bonus, 18 months COBRA; equity acceleration per award terms (PSUs at ≥ target or based on actual; time‑based may accelerate if awards are not assumed).
Table of potential payments (as of 12/31/2024; selected scenarios):
- Termination without cause/for good reason: Cash severance $3,137,400; STI $501,000; accelerated equity $4,053,053; health coverage $23,356; total $7,714,809.
- Termination during change‑in‑control period: Cash severance $4,706,100; STI $501,000; accelerated equity $4,053,053; health coverage $23,356; total $9,283,509.
- Change‑in‑control without termination (equity scenario per plan terms): accelerated equity $4,053,053.
Clawback: Recoupment Policy updated in 2023 to comply with SEC/NYSE; applies to incentive‑based pay upon restatement.
Board Governance (including dual role implications)
- Roles: Combined Chairman and CEO (Mr. Behrman); Board states this structure supports decisive leadership; mitigated by a Lead Independent Director (Lynn F. White) with enumerated duties (preside in executive sessions, liaison, agenda/time allocation, call meetings of independents, lead CEO evaluation, be available to major shareholders).
- Independence: 9 of 10 directors were independent in 2024; Behrman is the sole non‑independent director. All committees (Audit; Compensation & Talent; Nominating & Governance) are fully independent.
- Committees: Behrman serves on no Board committees.
- Meetings/attendance: Board held six meetings in 2024; 100% attendance by directors and for committee meetings served.
- Director compensation: CEO receives no additional fees for serving as director/Chairman (compensation fully reflected in executive tables).
Director Compensation (context for dual roles)
- Non‑employee director policy (2024): cash retainer $70k (raised to $75k from Q3 2024); equity $105k (raised to $120k starting 2025); Chair and committee fees; Lead Independent Director fee $45k.
- 2024 director compensation table confirms framework; CEO not included as he receives no additional director pay.
Performance & Track Record
| Performance indicator | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Total Shareholder Return – $100 initial value | 424 | 510 | 357 | 291 |
| Net income (loss), $000s | 43,545 | 230,347 | 27,923 | (19,353) |
| Adjusted EBITDA, $000s | 191,031 | 414,653 | 132,664 | 129,520 |
- 2021 Exchange Transaction improved credit rating, reduced cost of capital, and enhanced liquidity, contributing to stock appreciation in 2021; subsequent TSR declined through 2024.
- 2024 STI outcomes indicate strong EBITDA near budget but ammonia production below threshold (operational reliability headwind), and modest EHS payout; overall STI at 61% of target.
Say‑on‑Pay & Shareholder Feedback
- 2024 annual meeting say‑on‑pay: 49,660,335 votes for; 3,109,586 against; 52,945 abstentions (passed).
- 2025 proxy proposes annual say‑on‑pay again.
Compensation Peer Group (used for benchmarking)
Advansix; American Vanguard; Balchem; Compass Minerals; CSW Industrials; CVR Partners; Ecovyst; Hawkins; Ingevity; Intrepid Potash; Orion Engineered Carbons; Quaker Chemical; REX American Resources; Rogers; U.S. Silica (FY2024 peer set).
Risk Indicators & Red Flags
- Hedging/pledging prohibited by policy (reduces misalignment risk).
- Double‑trigger CIC cash multiple (3× salary+target bonus) is above typical mid‑cap medians; equity acceleration can occur if awards aren’t assumed in a CIC.
- One late Form 4 for CEO (and certain other insiders) in 2024 related to an RSU grant filing; company disclosed Section 16(a) compliance otherwise.
- No stock option overhang (no outstanding options or SARs), mitigating dilution risk.
Investment Implications
- Alignment: High equity mix; 1.8% personal ownership; compliance with 5× salary ownership guideline; anti‑hedging/pledging policy supports long‑term alignment with shareholders.
- Near‑term supply dynamics: 2024 vesting totaled ~307k shares for the CEO; additional time‑based RSU tranches and potential PSU vesting in 2025–2027 may create episodic selling to cover taxes/cash needs, though no options are outstanding.
- Pay for performance: STI tied 75% to EBITDA/production and 25% to EHS; 2024 results (EBITDA ~97% of plan; NH3 below threshold) signal management focus on operational reliability in 2025. Relative‑TSR PSUs link long‑term pay to shareholder returns (cap at target if 3‑yr TSR is negative), a shareholder‑friendly feature.
- Governance: Combined Chair/CEO offset by strong Lead Independent Director role and fully independent committees; 100% meeting attendance indicates active oversight.
- Transaction incentives: Double‑trigger 3× CIC cash plus equity acceleration could be supportive of strategic alternatives if value‑creative, but may be scrutinized by governance‑focused investors.