Shelly Chadwick
About Shelly Chadwick
Shelly M. Chadwick is Materion’s Vice President, Finance and Chief Financial Officer, serving in the role since at least November 2020 when a CFO sign‑on RSU grant was made; she continues to certify the company’s quarterly and Section 906 reports in 2025 . Company performance relevant to her incentive metrics: adjusted EBIT was $156.1M in 2023 (+~9% YoY), net income $95.7M, and adjusted EPS $5.64; value‑added sales grew ~1% in 2023 despite semiconductor headwinds . In 2024, MIP metrics landed below target—adjusted EBIT $131.0M, VAS growth −2.6%, SFCF $75.5M—driving payouts at 31.43% of target . Long‑term TSR PRSUs paid at the 78th percentile for the 2021–2023 cycle and ~58th percentile for 2022–2024, indicating above‑median shareholder return over multi‑year periods .
Fixed Compensation
Multi‑Year Summary Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $444,193 | $469,731 | $495,270 |
| Stock Awards ($) | $564,545 | $1,113,303 | $976,862 |
| Option Awards (SARs) ($) | $127,048 | $207,630 | $211,932 |
| Non‑Equity Incentive Plan (MIP) ($) | $410,325 | $216,249 | $112,645 |
| All Other Compensation ($) | $20,214 | $42,075 | $60,902 |
| Total ($) | $1,566,325 | $2,048,988 | $1,857,611 |
Base Salary and Target Bonus
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $483,000 | $512,000 |
| YoY Salary Increase (%) | 5.00% | 6.00% |
| Target Bonus (% of Salary) | 70% | 70% |
| Actual MIP Paid ($) | $216,249 | $112,645 |
Performance Compensation
Annual MIP Structure and 2024 Outcomes
| Metric (Weight) | Threshold (25% funds) | Target (100% funds) | Maximum (200% funds) | 2024 Actual | % of Target Earned |
|---|---|---|---|---|---|
| Adjusted EBIT (70%) | $120.3M | $160.4M | $200.5M | $131.0M | 31.43% |
| Value‑Added Sales Growth (15%) | —% | 3.0% | 8.0% | −2.6% | 0.00% |
| Simplified Free Cash Flow (15%) | $82.9M | $103.6M | $124.3M | $75.5M | 0.00% |
| Total MIP Funding | 31.43% |
- 2024 MIP target mix for Chadwick: Adjusted EBIT 49% of salary, VAS 10.5%, SFCF 10.5% (total target 70%) .
- Committee retains downward discretion for non‑financial factors; no adjustment was made in 2024 .
Long‑Term Incentive (LTI) Program and Grants
Vesting mechanics:
- SARs: generally vest one‑third annually over three years; 7‑year term; settled in shares .
- RSUs: generally vest one‑third annually over three years; time‑based; settled in shares .
- PRSUs: three‑year performance period; RTSR vs peer percentiles and ROIC targets; 0–200% funding; settled in stock .
2024 equity grants (March 1, 2024):
| Award Type | Shares Granted | Grant Date Fair Value ($) |
|---|---|---|
| SARs | 4,200 | $211,932 |
| RTSR PRSUs (target) | 1,629 | $314,283 |
| ROIC PRSUs (target) | 1,629 | $220,860 |
| RSUs | 3,258 | $441,720 |
| Total | $1,188,795 |
Special retention grants:
- Aug 8, 2025: special award of 4,696 service‑based RSUs; intended to cliff vest and pay out in shares on the third anniversary, with alternative vesting on retirement, death, disability, certain involuntary terminations, or “double‑trigger” change‑in‑control per agreement .
Historical PRSU payouts:
| Grant Year | 3‑Year Period | Combined Payout % | RTSR Percentile |
|---|---|---|---|
| 2021 | 2021–2023 | 149.0% | 78.0% |
| 2022 | 2022–2024 | 90.0% | 57.8% |
RTSR schedule (for 2024 grants): 25th percentile=50%, 50th=100%, 80th=200% .
ROIC schedule (2024 grants): 9.4%=50%, 11.8%=100%, ≥14.2%=200% .
Equity Ownership & Alignment
Beneficial Ownership
| As of Date | Shares Beneficially Owned | Percent of Class | SARs Exercisable within 60 days | RSUs/PRSUs Vesting within 60 days |
|---|---|---|---|---|
| Jan 31, 2024 | 29,146 | <1% | 10,696 | 9,866 |
| Jan 31, 2025 | 37,332 | <1% | 15,371 | 6,525 |
Outstanding Awards (12/29/2023 valuation for RSUs/PRSUs)
| Category | Count | Market/Payout Value ($) |
|---|---|---|
| Time‑based RSUs not vested | 14,975 | $1,948,697 |
| PRSUs unearned (at target) | 6,750 | $878,378 |
| SARs Exercisable | 5,494 | — |
| SARs Unexercisable | 10,114 | — |
| SARs Exercise Prices | $68.82 (2018/2021 grants) | — |
| $80.85 (2019/2022 grants) | — | |
| $113.28 (2023 grant) | — |
Stock ownership guidelines:
- Requirement: CFO must hold shares equal to 3× base salary; 5‑year compliance window; as of Dec 31, 2024 all covered NEOs met guidelines .
- Anti‑hedging/pledging: prohibited for insiders (no margin/pledge; no hedging instruments) .
Employment Terms
Severance Agreements (non‑CIC and CIC):
| Provision | Non‑CIC Termination (Chadwick) | Change‑in‑Control (CIC) + Qualifying Termination (Chadwick) |
|---|---|---|
| Cash severance multiple | 100% of highest annual salary + three‑year average cash incentive (target if <3 yrs) | Two‑year basis using higher of target for year of termination or average of prior 3 years |
| Benefits continuation | Up to 12 months medical & life | Up to 24 months per CIC terms (two‑year period basis) |
| Outplacement | Up to $20,000 | $20,000 |
| Annual MIP in CIC year | Pro‑rata target MIP for CIC year (lump sum) | Pro‑rata target value for CIC year |
| Equity vesting | RSUs pro‑rated; PRSUs pro‑rated based on actual perf.; SARs pro‑rated vesting | “Double‑trigger” acceleration per award terms upon CIC + qualifying termination |
| Tax gross‑ups | None (no 280G gross‑up; cut‑back only if beneficial) | None (same) |
Restrictive covenants and good reason:
- Non‑compete/non‑solicit: generally two years post‑termination (one year for certain roles) .
- “Good reason” definitions for equity agreements include material diminution in base pay or authority, relocation, or Company breach; cure periods apply .
Compensation Peer Group (benchmarking, RTSR comparator)
Advanced Energy Industries; Balchem; Carpenter Technology; CTS; Hexcel; Element Solutions; Fabrinet; Ingevity; Innospec; Kennametal; Knowles; Methode Electronics; Minerals Technologies; OSI Systems; Quaker Chemical; Rogers; Sensient Technologies; SMART Global Holdings; Standex International; Stepan; Viavi Solutions (2024 peer set; changes made to reflect Materion’s advanced materials focus) .
Targeting policy: NEO compensation initially targeted near median of peer and survey data; performance‑based equity comprises ~60% of target equity for CFO .
Say‑on‑Pay & Governance Signals
- 2024 say‑on‑pay approval >94% of votes cast; Committee kept program consistent while committing to ongoing improvement .
- Clawbacks: NYSE‑compliant compensation clawback policy (Oct 2, 2023) plus Supplemental Clawback Policy; awards also have detrimental‑conduct forfeiture/recoup provisions .
- Related party transactions: none disclosed in 2024 .
- Late Section 16 filings: one late Form 4 for Ms. Chadwick (and certain insiders) due to administrative error, covering RSU/PRSUs vesting and new grants .
Investment Implications
- Pay‑for‑performance alignment: CFO’s cash incentive tied primarily to adjusted EBIT (70%) with secondary VAS and SFCF (15%/15%); 2024 payouts at 31.43% reflect disciplined governance when operational metrics undershoot, reducing near‑term cash compensation risk .
- Retention and equity alignment: Robust multi‑year equity mix (PRSUs ~60% of CFO target equity opportunity) and 2025 special cliff RSU grant add retention hooks through 2028, while double‑trigger CIC terms mitigate turnover risk during strategic events .
- Insider selling pressure: Significant unvested RSU/PRSU inventory and SARs (5,494 exercisable; 10,114 unexercisable as of 12/29/2023) suggest periodic vest/settle events; anti‑pledging and ownership‑holding requirements dampen immediate sell pressure and preserve alignment .
- Execution track record: Above‑median TSR payouts (78th and ~58th percentiles on multi‑year cycles) indicate relative value creation, though 2024 operational headwinds (VAS decline and SFCF below target) warrant monitoring of margin recovery and cash generation into 2025–2026 PRSU cycles .
- Governance risk mitigants: No excise tax gross‑ups, strong clawbacks, and explicit non‑compete/non‑solicit provisions reduce shareholder‑unfriendly features and bolster risk controls .
Citations: **[1104657_0001104657-24-000044_mtrn-20240325.htm:51]** **[1104657_0001104657-25-000191_mtrn-ex312_2025q310q.htm:0]** **[1104657_0001104657-25-000191_mtrn-ex32_2025q310q.htm:0]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:24]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:25]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:56]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:38]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:59]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:68]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:34]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:54]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:55]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:57]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:58]** **[1104657_0001104657-25-000157_mtrn-20250808.htm:1]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:49]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:20]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:20]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:51]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:64]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:59]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:60]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:81]** **[1104657_0001104657-25-000191_formof2025restrictedstocka.htm:2]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:54]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:49]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:44]** **[1104657_0001104657-24-000044_mtrn-20240325.htm:45]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:41]** **[1104657_0001104657-25-000045_mtrn-20250327.htm:21]**