Vinod Khilnani
About Vinod M. Khilnani
Independent director and Non‑Executive Chairman of the Board since January 2018; director since 2009. Age 72. Former Executive Chairman (Jan–May 2013), Chairman/President/CEO (2007–2013), and CFO (2001–2007) of CTS Corporation, bringing deep operating, financial, and governance experience with international exposure .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| CTS Corporation | Executive Chairman; Chairman/President/CEO; Senior VP & CFO | CFO 2001–2007; CEO/Chair 2007–2013; Exec Chair Jan–May 2013 | Led transformation and governance; extensive global operations experience |
External Roles
| Organization | Role | Tenure | Notes / Potential Interlocks |
|---|---|---|---|
| ESCO Technologies Inc. | Director | Appointed Aug 2014 | Industrial tech; standard outside directorship; no related transactions disclosed |
| Gibraltar Industries | Director | Appointed Oct 2014 | Building products; standard outside directorship; no related transactions disclosed |
| 1st Source Corporation | Director | 2013–2023 | Retired from board in 2023; financial services |
Board Governance
- Roles: Non‑Executive Chairman of the Board (independent) since Jan 2018; chairs executive sessions; sets agendas; oversees CEO evaluation; coordinates independent director activities .
- Committee assignments: Chair, Nominating, Governance & Corporate Responsibility (NGCR); Member, Compensation & Human Capital Committee .
- Independence: Board determined he is independent (8 of 9 nominees independent; only CEO not independent) .
- Attendance: Board met 5 times in 2024; all directors attended at least 75% of board and assigned committee meetings; all directors attended the prior year’s annual meeting .
- Executive sessions: Independent directors hold an executive session at each regularly scheduled board meeting .
- Director elections: Declassified board; annual elections subject to majority voting policy (resignation expected upon majority-withheld outcome) .
Fixed Compensation
| Component (2024) | Amount ($) | Notes |
|---|---|---|
| Base annual cash retainer | 70,000 | Standard non‑employee director retainer |
| Chairman of the Board fee | 85,000 | Non‑Executive Chairman fee |
| NGCR Committee Chair fee | 10,000 | Committee chair retainer |
| Compensation Committee member fee | 7,500 | Member retainer |
| Cash fees earned (total) | 172,500 | Sum of above components |
| Equity grant (RSUs) | 133,078 | Grant date fair value under FASB ASC 718 |
| Total 2024 compensation | 305,578 | Cash + equity |
Year-over-year (2023 → 2024):
- Cash fees increased from $140,000 to $172,500 with higher base retainer and chair/member schedules .
- Equity RSUs grant-date value rose from $121,160 to $133,078 .
Performance Compensation
Directors receive time-based RSUs; no performance metrics are applied to director equity awards. 2024 grant: 1,150 RSUs granted on May 10, 2024 at $115.72 closing price; generally vest on May 10, 2025 if serving as a director on that date .
Key performance metrics used in the executive incentive plans he oversees (Compensation Committee member):
| Metric | Weight | Threshold | Target | Max | 2024 Actual | Payout vs Target |
|---|---|---|---|---|---|---|
| Adjusted EBIT | 70% | $120.3mm | $160.4mm | $200.5mm | $131.0mm | 31.43% |
| Value‑Added Sales growth | 15% | — | 3.0% | 8.0% | −2.6% | 0.00% |
| Simplified Free Cash Flow | 15% | $82.9mm | $103.6mm | $124.3mm | $75.5mm | 0.00% |
| Total MIP payout | — | — | — | — | — | 31.43% |
Long-term equity metrics (executives):
- RTSR PRSUs: Payout from 0–200% based on 3‑yr TSR percentile vs peer group; Target at 50th percentile; Max at 80th percentile .
- ROIC PRSUs (2024 grants): Threshold 9.4%; Target 11.8%; Max 14.2%; 0–200% payout .
Say‑on‑Pay outcomes: 94% approval in 2024; 92% in 2023—signals investor support for compensation program he helps oversee .
Other Directorships & Interlocks
| Company | Segment | Role | Overlap/Conflict Indicator |
|---|---|---|---|
| ESCO Technologies Inc. | Industrial tech | Director | No related-party transactions disclosed at Materion in 2024/2023 |
| Gibraltar Industries | Building products | Director | No related-party transactions disclosed |
| 1st Source Corporation | Financial services | Director (retired 2023) | No related-party transactions disclosed |
Expertise & Qualifications
- Financial and governance expertise from CFO and CEO roles; global operations and international experience .
- As independent Chair, demonstrates leadership in board process, agenda setting, CEO evaluation, and shareholder communications with the board .
Equity Ownership
| As of Date | Beneficial Ownership (shares) | % of Class | Deferred Shares under Director Plan |
|---|---|---|---|
| Jan 31, 2024 | 35,152 | <1% | 18,639 |
| Jan 31, 2025 | 36,392 | <1% | 18,727 |
- Anti‑hedging/pledging: Company prohibits hedging and pledging by directors and officers .
- Ownership guidelines: Non‑employee directors required to hold stock equal to 4× cash retainer; all non‑employee directors met guidelines as of Dec 31, 2023 . Company increased required stock ownership for CEO and non‑employee directors to six times salary from five in 2025 (policy change noted) .
Governance Assessment
Positive indicators:
- Independent Chair separates leadership roles; robust responsibilities enhance oversight and board effectiveness .
- Strong committee engagement: Chairs NGCR; member of Compensation; regular meetings (NGCR held 5 in 2024; Compensation held 5 in 2024) .
- Independence and attendance standards met; annual board elections with majority voting policy and executive sessions each meeting .
- Director compensation balanced: meaningful equity component aligns interests; stock ownership guidelines and anti‑hedging/pledging policy support alignment .
Potential risks / RED FLAGS to monitor:
- Late Section 16 filings: In 2023, a Form 4 related to RSU grants and dividend equivalents was filed late for all non‑employee directors, including Mr. Khilnani—administrative error disclosed; no similar issue disclosed for 2024 .
- Outside board seats: Multiple public company directorships (ESCO, Gibraltar) increase time commitments; Materion discloses no related‑party transactions and audit committee service load limits, which mitigates overboarding risk, but continued monitoring of workload and any future interlocks is prudent .
- Compensation policy changes: 2025 increase in ownership requirements to six times “salary” for non‑employee directors is atypical wording for directors; clarity on the measurement basis (retainer vs salary) should be confirmed in public disclosures .
Overall, governance signals remain strong: independent chair leadership, clear committee oversight (including ESG via NGCR), pay‑for‑performance architecture for executives, high say‑on‑pay support, and robust clawback policies. No related‑party transactions were identified in 2024/2023 .