Todd Butz
About Todd Butz
Chief Financial Officer of Mayville Engineering Company (MEC); announced plans to depart effective June 30, 2025, with succession by Rachele M. Lehr on April 22, 2025 . Tenure: CFO since January 2015; joined MEC in 2008 in finance roles . 2024 company performance: net sales $581.6M and net income $26.0M; annual incentives paid on 135.2% achievement tied to Adjusted EBITDA and Free Cash Flow . Pay-versus-performance TSR index improved to 105.43 in 2024 (from 96.71 in 2023 and 84.91 in 2022), with net income of $26.0M (2023: $7.8M; 2022: $18.7M) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mayville Engineering Company (MEC) | Chief Financial Officer | 2015–2025 | Led finance through IPO-era compensation transition, multi-year MBX value creation initiatives, and capital allocation discipline . |
| Mayville Engineering Company (MEC) | Finance leadership roles | 2008–2014 | Built internal finance capabilities ahead of public company phase . |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $473,800 | $473,800 |
| Target Bonus (%) | 120% | 75% |
| Target Bonus ($) | Not disclosed | $355,350 |
| Actual Bonus Paid ($) | $464,400 | $480,576 |
| Bonus Payout vs Target (%) | 81.7% | 135.2% |
| All Other Compensation ($) | $9,900 (401k contributions) | $10,350 (401k contributions) |
Performance Compensation
Annual Incentive Plan – 2024 Design and Outcomes
| Metric | Weighting | Threshold | Target | Maximum | Actual | Payout (% of Target) |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($M) | 50% | 57.0 | 76.0 | 91.2 | 65.3 | 71.8% |
| Free Cash Flow ($M) | 50% | 33.8 | 45.0 | 54.0 | 53.9 | 198.6% |
| Weighted Total | — | — | — | — | — | 135.2% |
Notes:
- 2023 plan used Net Income (40%), ROA (30%), and Free Cash Flow (30%); payout achieved 81.7% of target .
Long-Term Incentives – Grants and Structure
| Grant Year | Instrument | Grant Value ($) | Shares Granted | Vesting | Performance Metrics | Earnout Range |
|---|---|---|---|---|---|---|
| 2024 | RSUs | $679,000 | 52,841 | Ratable over 3 years | None | N/A |
| 2024 | PSUs | $291,000 | 22,646 | Cliff vest 3/15/2027, performance-dependent | ROIC & Adjusted EBITDA | 50%–200% of target |
| 2023 | Stock Options | $375,000 | See outstanding details below | 50% on 2/28/2024 and 50% on 2/28/2025 (for 2023 grant) | None | N/A |
Program evolution:
- Mix shifted from 30% PSUs / 70% RSUs in 2024 to 50% PSUs / 50% RSUs in 2025 to increase performance-linked equity .
Outstanding Equity and Vesting Schedules (as of 12/31/2024)
| Award Type | Quantity | Key Dates | Terms |
|---|---|---|---|
| Unvested RSUs | 64,401 | 11,560 vest 2/28/2025; 17,614 vest each on 3/15/2025, 3/15/2026, 3/15/2027 | Time-based vesting |
| Unvested PSUs | 22,646 | Vest 3/15/2027 | Earnout based on ROIC and Adjusted EBITDA |
| Options (Exercisable) | 69,963 @ $10.32; 39,683 @ $14.01; 39,126 @ $17.00 | Expire: 2/28/2032; 2/28/2031; 5/08/2029 respectively | — |
| Options (Unexercisable) | 20,205 @ $16.22 | 50% vest 2/28/2025; expire 2/28/2033 | — |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total Beneficial Ownership (shares) | 413,261 |
| Ownership (% of outstanding) | 2.0% |
| Options/RSUs deliverable within 60 days (combined) | 218,357 |
| ESOP Shares | 18,905 |
| 401(k) Plan Shares | 22,093 |
| Unvested RSUs (count) | 64,401 |
| Unvested PSUs (count) | 22,646 |
| Stock Ownership Guideline | CFO: 3x base salary |
| Compliance Status | In compliance as of 12/31/2024 |
| Hedging/Pledging | Prohibited (no margin or pledges; no derivatives/hedges) |
| Clawback Policy | Compliant with SEC/NYSE; applies to incentive compensation for 3 completed fiscal years preceding any restatement |
Implication for selling pressure: Material vesting events in late Feb and mid-March 2025, and March 2026/2027 could increase liquidity if shares are sold upon vesting; however, MEC’s insider trading policy governs trading windows and prohibits hedging/pledging .
Employment Terms
- Severance (pre-change-in-control): Lump sum equal to 1x current base salary plus target annual cash bonus upon involuntary termination without cause or resignation for good reason; requires release of claims .
- Change-in-control protections: If terminated without cause or for good reason within 2 years after a change-in-control, severance equals 2x base salary plus target bonus; continued medical, dental, life insurance for 24 months; equity/cash incentives granted after the change-in-control deemed earned/vested in full upon termination; double-trigger vesting framework .
- Restrictive covenants: Non-compete, non-solicit, and non-interference during employment and for 12 months post-termination; confidentiality obligations .
- Tax gross-ups: None; “best-net” cutback if 280G excise tax would apply .
- Deferred Compensation Plan: Eligible to defer up to 50% of base salary and up to 100% of annual cash incentive; plan terminates and distributes upon change-in-control .
- Announced departure payment: $1,042,360 under severance agreement, in connection with planned departure (announced Dec 11, 2024) .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| TSR Index (fixed $100 as of 12/31/2021) | 84.91 | 96.71 | 105.43 |
| Net Income ($M) | 18.7 | 7.8 | 26.0 |
| Net Sales ($M) | — | — | 581.6 |
| Adjusted EBITDA ($M) | — | — | 65.3 |
Compensation Committee & Governance Notes
- Compensation Committee members: Jennifer J. Kent (Chair), Allen J. Carlson, Steven L. Fisher, Robert L. McCormick .
- Independent consultant: Pearl Meyer engaged for peer group design and benchmarking; no conflicts cited .
- 2024 peer group includes mid-cap industrials (e.g., AZZ Inc., Myers Industries, Shyft Group) used for market alignment .
- Insider trading policy: prohibits hedging, pledging, margin accounts, and derivatives; company itself abstains from trading while in possession of MNPI .
- Say-on-pay: First advisory vote scheduled at 2025 annual meeting following exit from EGC status; board recommends annual frequency .
Investment Implications
- Alignment: High equity exposure (2.0% ownership; meaningful unvested RSUs/PSUs) plus strict no-pledging/hedging policy and stock ownership guidelines suggest strong shareholder alignment .
- Performance linkage: 2024 cash bonus tied 50/50 to Adjusted EBITDA and Free Cash Flow; LTIs incorporate ROIC and Adjusted EBITDA with 50%–200% earnout, increasing performance weighting in 2025—supports pay-for-performance .
- Retention/transition risk: CFO succession in April–June 2025 introduces execution risk during continuing MBX initiatives; severance payment quantified ($1,042,360), and well-defined non-compete/non-solicit mitigate competitive leakage .
- Potential selling pressure: Concentrated vesting dates in Feb/March 2025–2027 could increase float if shares are sold upon vesting; monitor trading windows and Form 4 activity around these dates .
- Change-in-control economics: Double-trigger 2x cash severance and accelerated award treatment raise deal-related payout sensitivity; however, no tax gross-ups and clawback reduce governance red flags .