Jonathan B. DeGaynor
About Jonathan B. DeGaynor
Jonathan B. DeGaynor, age 59, is President and Chief Executive Officer of Methode Electronics (MEI) and has served on the Board since July 2024; he is not an independent director solely due to his executive role . He was appointed CEO on July 15, 2024 to lead a transformation focused on execution, cost reduction, and program launches (22 in fiscal 2025 with >30 targeted in fiscal 2026) . Compensation is tied to pre-tax income (70%), free cash flow (30%), and long-term TSR-based PSUs, with an independent consultant (FW Cook) advising and a policy target near the peer-group median . Company revenue has declined over FY2023–FY2025 while EBITDA contracted, highlighting execution urgency under his tenure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Stoneridge, Inc. | President & CEO | 2015–2023 | Led a global designer/manufacturer of electrical/electronic systems for automotive, commercial, off-highway, and agricultural markets . |
| Guardian Industries Corp. | VP, Strategic Planning & Innovation | Pre-2015 | Strategy and innovation for industrial glass/building products across commercial, residential, automotive applications . |
| SRG Global (Guardian company) | VP Business Development & Managing Director, Asia | 2008–2014 | Growth and Asia expansion for chrome-plated components across auto, truck, consumer goods . |
| Autocam Corporation | COO, International | 2005–2008 | Global operations of precision-machined components for auto industry . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Racing and Performance, Inc. | Non-employee Executive Chairman | Current | Automotive performance systems supplier in aftermarket space . |
Fixed Compensation
| Component | 2025 Terms | Notes |
|---|---|---|
| Base Salary | $1,000,000 | Set per offer letter. |
| Target Annual Bonus | 125% of salary ($987,197 target for FY2025, prorated) | Metrics set by Compensation Committee. |
| Actual Annual Bonus Paid | $750,270 | Committee adjusted plan for addbacks; weighted payout 76% of target . |
| Sign-on Equity | RSUs valued at $500,000; 50% vest on each of the first two anniversaries of start date | Priced at market on employment start; continued service required. |
| Long-term Incentive (annual target) | $4,000,000; 40% time-vested RSUs, 60% TSR-based PSUs (prorated in FY2025) | Time RSUs vest 1/3 on April 30, 2025/2026/2027; PSUs vest based on TSR through FY2027 . |
| Perquisites | Temporary housing (Chicago), relocation assistance, reimbursement for commercial air travel (Chicago–Detroit) | Deferred compensation plan available; company has not contributed on behalf of NEOs . |
Performance Compensation
Annual Performance-Based Bonus Structure (FY2025)
| Metric | Weighting | Threshold | Target | Maximum | FY2025 Payout Basis | CEO Outcome |
|---|---|---|---|---|---|---|
| Pre-tax Income | 70% | $0 = 50% | $3,140,000 = 100% | $22,065,000 = 200% | Committee-approved addbacks; plan paid at 76% weighted overall | $750,270 vs. $987,197 target |
| Free Cash Flow | 30% | $(2,541,368) = 50% | $598,632 = 100% | $29,523,632 = 200% | As above; part of 76% weighted payout | Included in above total |
Long-Term Incentive Awards (FY2025 grants; vesting/certification post-FY2027)
| Component | Weighting | Grant Detail | Vesting Terms | Performance Targets | Payout Status |
|---|---|---|---|---|---|
| Time-based RSUs | 40% of LTI | 92,506 RSUs (LTI portion) | One-third vests on April 30, 2025/2026/2027 | N/A | Ongoing; service-based vesting . |
| TSR-based PSUs | 60% of LTI | Target 138,758 PSUs; Threshold 69,379; Max 277,516 | Certified after FY2027; continued employment required | Annualized TSR April 29, 2024–April 30, 2027: 10% (50%), 15% (100%), 20% (200%) | Not yet determined (certification post-FY2027) . |
| Sign-on RSUs | N/A | 36,630 RSUs; 2-year vesting (50% each anniversary) | Vest at first and second anniversaries of 7/15/2024 | N/A | Ongoing. |
Option awards are not disclosed; equity incentives are RSUs and PSUs only .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 62,436 shares; includes 32,733 held jointly with spouse and 1,984 in 401(k) . |
| Ownership % of Outstanding | <1% (asterisk denotes less than 1%) . |
| Unvested RSUs (FY-end) | 98,301 units; market value $656,651 at $6.68 per share (5/2/2025 close) . |
| Unearned PSUs (target) | 138,758 units; market/payout value $926,903 at $6.68 per share (target) . |
| Shares Vested in FY2025 | 30,835 shares; value realized $193,335 . |
| Ownership Guidelines | CEO 5x salary; directors 5x cash retainer; phase-in with mandatory retention of net shares until compliance (execs retain 75% of net shares until guideline met) . |
| Hedging/Pledging | Prohibited for directors and executive officers; no margin or pledging allowed . |
| Clawback | Incentive Compensation Recovery Policy for material noncompliance restatements (3-year lookback) . |
Employment Terms
| Provision | Economics / Terms |
|---|---|
| Employment Start | July 15, 2024 . |
| Severance (without cause) | 2x salary + target bonus paid over two years; pro rata of actual bonus for the year; COBRA premiums up to 18 months . |
| Change-of-Control (double trigger) | If terminated without cause or resigns for good reason within 2 years of CoC: 3x base salary + 3x target bonus; COBRA 18 months; no excise tax gross-ups . |
| Equity Acceleration (CoC) | If awards not assumed OR assumed then terminated without cause/resigns for good reason within 2 years: all unvested RSUs fully vest; PSUs vest based on actual TSR performance as of CoC . |
| Death/Disability | All RSUs fully vest; PSUs vest at target . |
| Qualified Retirement | Pro rata vesting of RSUs; PSUs eligible pro rata based on actual performance on original schedule . |
Illustrative potential payments (assuming event on 5/2/2025 at $6.68/share): Termination without cause: $4,500,000 salary+bonus; $299,825 RSU vesting; $268,685 PSU vesting; $40,506 health benefits; CoC termination: $6,750,000 salary+bonus; $987,197 annual bonus; $40,506 health benefits .
Board Governance
- Board service: Director since July 2024; not independent due solely to executive officer status .
- Separate Chair: Mark D. Schwabero is Chairman (appointed September 2024), providing separation from CEO role .
- Committee memberships: Audit (Chair: Mary A. Lindsey), Compensation (Chair: Bruce K. Crowther), Nominating & Governance (Chair: Brian J. Cadwallader); DeGaynor is not listed as a member on these committees .
- Committee independence: All committee members meet SEC/NYSE independence standards .
- Compensation Committee practices: Independent consultant (FW Cook), seven meetings in fiscal 2025, executive sessions without management as needed .
Performance & Track Record
Fiscal performance context and transformation priorities (execution, cost actions, supply chain, inventory management) were emphasized under DeGaynor’s leadership, with record Industrial segment volumes and 22 program launches in FY2025 .
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenues ($USD) | $1,179,600,000 | $1,114,500,000 | $1,048,100,000 |
| EBITDA ($USD) | $146,700,000* | $56,000,000* | $37,300,000* |
- Values retrieved from S&P Global.
Most important financial measures used for compensation in fiscal 2025: EBITDA, pre-tax income, and free cash flow . The prior 2021 LTI Program for other executives paid no RSAs or Performance Units as FY2025 EBITDA was below threshold, underscoring earnings pressure during the period .
Compensation Committee Analysis
- Benchmarking: Peer group refined (removed LCI Industries, Patrick Industries, Visteon; added Kimball Electronics, Knowles, Modine) to better match size/business; target total compensation generally at median .
- Peer group constituents (FY2025 benchmarking): Belden; Benchmark Electronics; Cooper-Standard; CTS; Fabrinet; Franklin Electric; Gentherm; Kimball Electronics; Knowles; Littelfuse; Modine; OSI Systems; Rogers; Stoneridge; TTM Technologies .
- Governance practices: Significant at-risk pay; capped annual bonus at 200%; stock ownership guidelines; clawback; no hedging/pledging; no excise tax gross-ups; independent consultant .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approvals: ~97% in 2023 and ~96% in 2024; committee considers feedback in program design .
Equity Vesting Schedules and Insider Selling Pressure
- Time-based RSUs: One-third vest annually on April 30, 2025/2026/2027 (LTI) .
- Sign-on RSUs: 50% vest on each of the first two anniversaries (7/15/2025 and 7/15/2026) .
- PSUs: Vest following FY2027 based on TSR; not before committee certification .
- Retention mechanics: Executives must retain 75% of net shares until stock ownership guidelines are met (CEO 5x salary), reducing near-term selling capacity . Hedging/pledging is prohibited .
Risk Indicators & Red Flags
- Compensation adjustments: FY2025 bonus plan addbacks led to a 76% weighted payout despite performance below initial threshold for pre-tax income, indicating committee discretion during transition; maximum remains capped at 200% .
- Governance mitigants: Double-trigger CoC; clawback policy; prohibition on hedging/pledging; no excise tax gross-ups .
- Internal control remediation: Audit Committee reported remediation of prior year material weaknesses in FY2025 .
Investment Implications
- Alignment: High equity mix with TSR-based PSUs and meaningful ownership guidelines supports pay-for-performance and alignment with shareholders .
- Retention risk: Severance and double-trigger CoC protections (2x severance; 3x under CoC for CEO) plus vesting mechanics reduce turnover risk but add potential payout obligations in downside scenarios .
- Near-term flow dynamics: Annual RSU vest dates (April 30) and sign-on RSU anniversaries (July 15) create scheduled equity events; retention requirements to hold 75% of net shares and hedging/pledging prohibitions limit discretionary selling pressure .
- Execution focus: Declining revenue and EBITDA over FY2023–FY2025 frame the transformation agenda; bonus metrics centered on pre-tax income and free cash flow indicate emphasis on profitability and cash generation . The forfeiture of legacy EBITDA-tied RSAs for other executives underscores the payoff contingent on operational improvement .