Joseph Hanna
About Joseph Hanna
Joseph F. Hanna, 62, is President, Chief Executive Officer, and Director of McGrath RentCorp (MGRC). He has served as CEO since February 2017 and joined the board in 2017, with prior roles including COO (2007–2017), SVP Operations (2005–2007), and VP Operations (2003–2005). He holds a B.S. in Electrical Engineering from the United States Military Academy (West Point) and previously held sales/operational leadership roles at SMC Corporation of America; he also served as an officer in the U.S. Army . Under his leadership, MGRC delivered full-year 2024 revenue and Adjusted EBITDA growth of 10%, achieved 200% payout on 2022–2024 PSUs (ROIC and revenue targets), and reported Q2’25 growth of +5% in rental operations and +3% in Adjusted EBITDA .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| McGrath RentCorp | President & CEO | 2017–present | Led strategy and execution through 2024 growth, PSU outperformance; steered company through merger review and termination . |
| McGrath RentCorp | Chief Operating Officer | 2007–2017 | Drove operational strategy and growth across rental businesses . |
| McGrath RentCorp | SVP Operations | 2005–2007 | Operational leadership during expansion period . |
| McGrath RentCorp | VP Operations | 2003–2005 | Early operational leadership after joining MGRC . |
| SMC Corporation of America | Sales/Operational leadership | — | Pre-MGRC commercial experience; operational foundation . |
| U.S. Army | Officer | — | Leadership and technical credentials . |
External Roles
- No external public company directorships disclosed for Hanna; he serves solely as an MGRC director and CEO .
Fixed Compensation
| Component | 2024 | 2025 | Notes |
|---|---|---|---|
| Base salary | $850,000 | $875,000 | Approved increases reflect merit/market alignment . |
| Target annual bonus (% of salary) | 100% | — | CEO target 100% of base salary . |
| 2024 actual annual bonus paid | $887,613 | — | 104.4% of target, paid in 2025 . |
| 2024 one-time discretionary bonus | $300,000 | — | Awarded for execution through pending/terminated merger . |
| CEO pay ratio (2024) | 72x | — | CEO $5,477,843 vs median employee $75,926 . |
Performance Compensation
2024 annual incentive structure: 75% Company Adjusted EBITDA; 25% Personal Annual Priorities. Threshold 90% (50% payout), target 100% (100%), maximum 110% (200%) for profitability; individual priorities capped at 100% .
| Metric | Weight | Target | Actual/Result | Payout | Vesting/Payment |
|---|---|---|---|---|---|
| Company Adjusted EBITDA | 75% | $349,676,000 | $351,725,000 (100.59%) | 105.9% | Paid in 2025 . |
| Personal Annual Priorities | 25% | Goals set by Comp Comm. | 100% achieved | 100.0% | Paid in 2025 . |
| Total | 100% | — | — | 104.4% of target | Paid in 2025 . |
PSUs (structure and recent achievement):
- Historical long-term mix: 50% PSUs (3-year cliff vest; ROIC and revenue equally weighted), 50% RSUs. 2024 awards were 100% time-based RSUs due to pending merger; mix reverted to 50% PSUs/50% RSUs in 2025 .
- 2022–2024 PSU performance: 200% earned; Hanna target 8,310 → 16,620 earned .
Equity Ownership & Alignment
Ownership snapshot and policies:
- Beneficial ownership: 165,878 shares (less than 2% of outstanding) .
- Hedging/pledging: Prohibited for all employees, officers, and directors (alignment positive; reduces downside-insurance risk misalignment) .
- Executive stock ownership guidelines (amended Feb 14, 2025): CEO must hold shares equal to 5x base salary; 50% net shares from vesting must be held until guideline met; 5-year compliance window; guidelines calculated on vested RSUs/PSUs (unvested RSUs and vested options excluded) .
- Insider trading plans: During the three and nine months ended Sep 30, 2025, no director/officer adopted or terminated Rule 10b5‑1 or non‑Rule 10b5‑1 trading arrangements (no mechanical selling program initiation/termination signal) .
Unvested awards and near-term vesting/selling pressure indicators (as of 12/31/2024):
| Award type | Grant date | Unvested units | Market value | Vesting schedule/dates |
|---|---|---|---|---|
| RSUs | 2/25/2022 | 2,771 | $309,853 | 33%/33%/34%; final tranche vest 2/25/2025 . |
| RSUs | 2/24/2023 | 6,394 | $714,977 | 33%/33%/34% vesting 2/24/2024, 2/24/2025, 2/24/2026 . |
| RSUs | 2/23/2024 | 26,420 | $2,954,284 | 33%/33%/34% vesting 2/23/2025, 2/23/2026, 2/23/2027 . |
| PSUs (2022 grant) | 2/25/2022 | 16,620 | $1,858,448 | 3-year cliff at 2/25/2025; earned at 200% for 2022–2024 period . |
| PSUs (2023 grant) | 2/24/2023 | 16,310 | $1,823,784 | 3-year cliff at 2/24/2026; earned based on ROIC and revenue . |
Director compensation: Hanna, as an employee director, receives no additional director compensation (avoids double pay) .
Employment Terms
- No employment agreement; severance governed by company plans .
- Amended Severance Plan (effective Feb 2025):
- Termination without cause (pre‑CoC or >24 months post‑CoC): for CEO, lump sum equal to 18 months of base salary + 150% of target bonus; up to 18 months COBRA; prorated vesting of RSUs and PSUs at target; outplacement assistance .
- Double-trigger CoC (within 24 months post‑CoC termination without cause or resignation for good reason): for CEO, 24 months of base salary + 200% of target bonus; up to 24 months COBRA; 100% vesting of RSUs and PSUs at target; outplacement assistance .
- 2024 RSU award includes CoC-related acceleration upon qualifying termination within 12 months after a change in control (protective feature) .
- Clawback: Amended/Restated Compensation Recoupment Policy consistent with Nasdaq Rule 10D‑1; recovers excess incentive pay over 3 years upon restatement .
- No tax gross-ups; limited perquisites (health plan continuation at retiree’s expense) .
Board Governance (Hanna as a Director)
| Attribute | Detail |
|---|---|
| Board service | Director since 2017 . |
| Independence | Not independent (executive officer); five of six directors are independent . |
| Chair/CEO structure | Roles are separated; non-executive Chair (Bradley M. Shuster) . |
| Committee roles | No committee membership for Hanna; committees comprised of independent directors . |
| Meeting attendance | All directors attended ≥75% of 2024 Board/committee meetings . |
| Executive sessions | Non-employee/independent directors generally meet in executive session after every Board meeting . |
Dual-role implications:
- CEO + Director with independent Chair and independent committees mitigates concentration of power and supports oversight; Hanna is not on audit/compensation/governance committees, preserving independence for pay and audit processes .
Performance & Track Record
| Metric/Context | Result |
|---|---|
| 2024 revenue growth | +10% YoY . |
| 2024 Adjusted EBITDA growth | +10% YoY . |
| 2024 Company Adjusted EBITDA vs plan | $351.7m vs $349.7m (100.59% of plan) . |
| 2022–2024 PSU performance | 200% earned (ROIC and revenue goals) . |
| Q2 2025 rental operations growth | +5% YoY . |
| Q2 2025 Adjusted EBITDA growth | +3% YoY . |
Selected strategic highlights (2025 Q2):
- Mobile Modular grew total revenues +8%; new modular sales +13%; Enviroplex strong margins; TRS-RenTelco rental revenues +7% with utilization up to 65%; active M&A pipeline with two tuck-ins closed in Q2’25 .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval: 97%; 5‑year record of >95% support, indicating strong investor endorsement of program design .
Compensation Peer Group (context for benchmarking)
Semler Brossy advised the Compensation Committee; 2024 peer group included equipment/services and rental companies such as WillScot Mobile Mini, GATX, H&E Equipment, UniFirst, among others (Triton removed for 2025 due to acquisition) .
Compensation Structure Analysis
- 2024 shift to 100% time-based RSUs (pending merger) temporarily reduced performance linkage; reversion to 50% PSUs/50% RSUs in 2025 restores stronger pay-for-performance design (PSUs tied to 3-year ROIC and revenue) .
- 2024 one-time discretionary bonuses for NEOs represent incremental cash above formulaic outcomes but followed achievement of plan and complex transaction management; say‑on‑pay support remained high .
- No single-trigger CoC cash severance; double-trigger structure aligns with governance best practices; no tax gross-ups .
Risk Indicators & Red Flags
- Hedging/pledging prohibited (reduces alignment risk) .
- No equity repricing; clawback policy in place; no related party transactions in 2024; high say‑on‑pay support (low governance risk) .
- 2024 all‑RSU LTI and discretionary bonuses are watch items but were disclosed as temporary and reversed for 2025 .
Equity Ownership & Alignment (Detail Table)
| Item | Value |
|---|---|
| Beneficial ownership (shares) | 165,878 (<2% of shares outstanding) . |
| Unvested RSUs (units; market value at 12/31/24) | 2,771 ($309,853); 6,394 ($714,977); 26,420 ($2,954,284) . |
| Unearned PSUs outstanding (units; market value at 12/31/24) | 16,620 ($1,858,448); 16,310 ($1,823,784) . |
| Executive stock ownership guideline | CEO = 5x salary; 50% net shares held until met; 5-year window . |
| Hedging/pledging | Prohibited by policy . |
Employment Terms (Detail Table)
| Scenario | Key economics |
|---|---|
| Termination without cause (pre‑CoC or >24m post‑CoC) | CEO: 18 months base + 150% target bonus; COBRA up to 18 months; prorated vesting of RSUs/PSUs at target; outplacement . |
| Double-trigger CoC (≤24m post‑CoC) | CEO: 24 months base + 200% target bonus; COBRA up to 24 months; 100% vesting of RSUs and PSUs at target; outplacement . |
| Clawback | Executive incentive compensation subject to recoupment under restatement policy . |
| Employment agreement | None; severance plans govern . |
Investment Implications
- Alignment: High proportion of at-risk pay (annual EBITDA + multi-year PSUs) with strict hedging/pledging prohibitions and elevated CEO ownership guidelines supports shareholder alignment; strong historical PSU achievement (200%) underscores execution credibility .
- Near-term supply/vesting watch: Multiple scheduled RSU and PSU vests in Feb 2025–2027 could create episodic insider liquidity; monitor Form 4s/10b5‑1 plans around vest dates (no new plans adopted/terminated in Q3’25) .
- Retention/CoC economics: Double-trigger CoC terms are generous yet standard (24 months base + 200% target bonus) and should stabilize leadership through M&A cycles; no employment agreement increases flexibility .
- Governance: Independent Chair, fully independent compensation/audit/governance committees, and strong say‑on‑pay support reduce governance risk; 2024 all‑RSU awards and discretionary bonuses were temporary and reversed in 2025 .