Joseph P. Kelley
NORDSONAbout Joseph P. Kelley
Executive Vice President, Industrial Precision Solutions (IPS) at Nordson Corporation. Joined Nordson in 2020 as EVP & CFO and was appointed IPS segment leader effective November 1, 2023; age 51 at appointment, with prior CFO experience at Materion and earlier finance roles at Lincoln Electric, Avient (PolyOne), and CNH Global . Nordson’s 2024 performance backdrop for incentive alignment: record sales ~$2.7B, record EBITDA ~$849M, operating profit 25% of sales, and 10-year TSR of 259% . 2024 Annual Cash Incentive metrics focused on Organic Revenue and Base Business Operating Profit; 2022–2024 PSUs paid at 120% based on EPS growth, ROIC, and EBITDA margin attainment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Nordson Corporation | EVP & CFO | 2020–2023 | Led accounting, tax, treasury, internal audit, IR; prepared capital structure for growth; later transitioned to lead IPS . |
| Materion Corporation | CFO | ~2015–2020 | Finance leadership at advanced materials manufacturer; public company CFO experience . |
| Lincoln Electric; Avient (PolyOne); CNH Global | Various progressive finance/accounting roles (US & Europe) | Prior to 2015 | Built multinational operating and manufacturing finance expertise . |
External Roles
No public company directorships or external board roles disclosed for Joseph P. Kelley .
Fixed Compensation
Multi-year cash compensation and target bonus:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 527,000 | 543,000 | 563,000 |
| Target Bonus (% of Salary) | 80% | 80% | 80% |
| Target Bonus ($) | 421,600 | 434,400 | 450,400 |
| Actual Annual Cash Incentive ($) | 733,584 | 122,921 | 418,757 |
Notes:
- Annual Cash Incentive (ACIA) metrics and weighting: Corporate and Segment performance; Organic Revenue 40%, Base Business Operating Profit 60% .
- 2024 combined factor payout for Kelley: Company 43.5%, Segment 49.5%, Combined 93.0% of target .
Performance Compensation
Annual Cash Incentive – FY 2024
| Component | Weight | Target | Actual Currency Result (% of Target) | Payout Basis | Payout |
|---|---|---|---|---|---|
| Company Organic Revenue | 40% | $2,655mm | 69.2% | Actual currency, no FX adjustment | — |
| Company Base Business Operating Profit | 60% | $697mm | 100.2% | Actual currency, no FX adjustment | — |
| IPS Organic Revenue | 40% | $1,297mm | 96.4% | Actual currency, no FX adjustment | — |
| IPS Base Business Operating Profit | 60% | $465mm | 102.1% | Actual currency, no FX adjustment | — |
| Combined Factor Payout | — | — | Company 43.5%; Segment 49.5% | — | 93.0% of target; $418,757 |
Performance Share Units (PSUs)
| PSU Cycle | Metric Weighting | Target | Actual | Result (% of Target) | Payout |
|---|---|---|---|---|---|
| 2022–2024 | EPS Growth 40%; ROIC 30%; EBITDA Margin 30% | EPS 8%, ROIC 12%, EBITDA 28% each year | 2022: EPS 20%, ROIC 19%, EBITDA 31%; 2023: EPS -10%, ROIC 15%, EBITDA 30%; 2024: EPS -4%, ROIC 12%, EBITDA 30% | 2022: 192%; 2023: 91%; 2024: 77%; Average = 120% | Kelley target 2,181 units; payout 2,615 units (120%) |
| 2024–2026 (in-flight) | EPS Growth 40%; ROIC 30%; EBITDA Margin 30% | EPS 7%; ROIC 13%; EBITDA 30% targets; Threshold/Max set | Not determined | — | Kelley target 3,804 units; threshold 951; max 7,608 |
Options and RSUs – FY 2024 Grants
| Award | Grant Date | Quantity | Exercise/Valuation Price | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| Stock Options | 12/1/2023 | 6,293 | $238.80/sh | 25% annually over 4 years; 10-year term | 509,985 |
| RSUs | 12/1/2023 | 1,522 | $238.80/sh | Generally 3-year incremental vest | 363,454 |
| Special RSUs (retention) | 10/31/2023 | 3,396 | $212.59/sh | Cliff vest; 3 years for Kelley per 8-K | 721,956 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 47,854 shares as of Jan 3, 2025 (includes rights to acquire within 60 days) . |
| Rights to Acquire within 60 Days | PSUs settlement: 2,615 shares; Vested stock options exercisable: 42,103 shares . |
| Shares Outstanding | 57,087,783 as of Jan 3, 2025 . |
| Ownership % of SO | ~0.084% (47,854 ÷ 57,087,783), derived from disclosed figures . |
| Unvested RSUs | Oct 31, 2023 special RSUs: 3,396 units; prior RSUs 1,505 (12/1/2022) — generally 3-year incremental vest . |
| Outstanding Options | 2022 grant: 8,698 unvested at 10/31/2023 (ex. price $240.01); plus earlier 2020/2021 option tranches . |
| Ownership Guidelines | Other Executive Officers: 2× base salary; CFO role 3×; Kelley’s requirement became 2× post-11/1/2023 with IPS role . |
| Compliance Status | Meets/exceeds ownership guidelines (as of 1/3/2025) . |
| Pledging/Hedging | Prohibited for directors and executive officers . |
Employment Terms
- Change-in-Control (CIC) Retention Agreements: For executive officers, double-trigger vesting and benefits upon qualifying termination within 24 months post-CIC; 2× (salary + target bonus) cash severance; pro-rata ACIA; benefit continuation; outplacement; additional pension service credits for eligible executives; no excise tax gross-ups for agreements executed after Nov 1, 2015 .
- Non-CIC Severance: Only CEO has non-CIC severance; no enhancements for other NEOs absent CIC .
- Clawback Policy: Recoupment of excess cash/equity incentive compensation upon restatements (big R/little r) within 3 fiscal years; Board may claw back for Code violations/willful misconduct .
- Anti-Hedging/Anti-Pledging: Hedging, short sales, derivative transactions, and pledging prohibited for directors/executive officers .
Vesting Schedules and Insider Selling Pressure
- Special RSUs granted 10/31/2023 cliff-vest after 3 years (for Kelley), implying a vest on 10/31/2026 that could create a discrete liquidity event .
- RSUs granted 12/1/2022 generally vest in three equal annual installments beginning one year after grant (e.g., 12/1/2023, 12/1/2024, 12/1/2025), creating ongoing release cadence .
- Stock options vest 25% annually over four years, potentially increasing exercisable overhang annually; options only have value above grant price ($240.01 for 2022, $238.80 for 2023) .
Compensation Structure Analysis
- Mix Shift: 2024 long-term incentive mix increased PSUs to 50% (from 40%) and decreased options to 30%, raising performance sensitivity and reducing downside risk vs. options-heavy design .
- Annual Incentive Rigor: 2024 ACIA paid at 93% of target for Kelley, reflecting near-target organic revenue and above-target base business operating profit in IPS; no discretionary adjustments used .
- PSUs Outcome: 2022–2024 PSUs paid 120% of target; strong 2022 results offset by weaker EPS growth in 2023–2024; payout averaged across years per design .
- Perquisites: Modest and capped (airline clubs, financial/tax planning up to $5,000, executive physicals) — low governance risk .
- Peer Benchmarking: Compensation set to approximate peer group median; Exequity engaged as independent compensation consultant .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay support: 94.8% in 2024; prior years: 95.06% (2023), 93.99% (2022), signaling strong shareholder endorsement .
- Peer Group: AMETEK, Graco, IDEX, ITT, Teleflex, Teradyne, Entegris, Keysight, etc.; criteria aligned to revenue/market cap ranges and business profile .
Performance & Track Record
- Role Transition: Moved from CFO to lead IPS effective Nov 1, 2023, with retention RSUs to support continuity and strategy execution .
- Segment Outcomes (2024): IPS organic revenue at 96.4% of target; base business operating profit at 102.1% of target, driving combined factor payout of 93% for Kelley .
- Corporate Context (2024): Record sales ~$2.7B, record EBITDA ~$849M, operating profit 25% of sales, dividend increase; supports PSU performance metric framework .
Risk Indicators & Red Flags
- Hedging/Pledging: Prohibited; no pledging disclosed for Kelley .
- Tax Gross-Ups: Eliminated for CIC agreements executed after Nov 1, 2015 .
- Option Repricing: Prohibited without shareholder approval .
- Related Party Transactions: 8-K notes no direct/indirect interest for Kelley in transactions requiring Item 404(a) disclosure .
- Severance Enhancements: None disclosed for Kelley outside CIC; only CEO has non-CIC severance provision .
Equity Ownership & Alignment Table (Detail)
| Category | Quantity/Value |
|---|---|
| Beneficially owned shares (incl. rights within 60 days) | 47,854 |
| Options exercisable within 60 days | 42,103 |
| PSUs to settle within 60 days (2022–2024 cycle) | 2,615 |
| RSUs outstanding (selected) | 3,396 special retention RSUs (10/31/2023); 1,505 RSUs (12/1/2022) |
| Ownership guideline requirement | 2× salary for other executive officers; Kelley’s requirement became 2× post-IPS appointment |
| Compliance status | In compliance (as of 1/3/2025) |
| Anti-hedging/pledging policy | Prohibits hedging and pledging by directors/NEOs |
Employment Terms (Severance/CIC Economics)
| Provision | Terms |
|---|---|
| CIC Severance | Double-trigger; 2× (base salary + target ACIA); pro-rata ACIA; benefits continuation; outplacement; possible additional pension service credits; no excise tax gross-ups for agreements executed after 11/1/2015 . |
| Equity Treatment at CIC | Full vesting of outstanding share-based awards on double-trigger basis under 2021 plan . |
| Non-CIC Severance | CEO-only; other NEOs (including Kelley) have no special non-CIC severance enhancements . |
| Clawback | Restatement-based recoupment within 3 fiscal years; Board discretionary clawback for Code violations/willful misconduct . |
Investment Implications
- Alignment and leverage: Kelley’s pay mix shifted toward PSUs (50% of LTI), strengthening pay-for-performance linkage; 2022–2024 PSU payout at 120% suggests balanced execution across multi-year metrics despite EPS volatility .
- Near-term supply overhang: 10/31/2026 cliff vest of 3,396 special RSUs (retention) presents a discrete potential selling window; ongoing RSU and option vesting provide annualized overhang but are standard at Nordson .
- Segment execution: 2024 IPS beat on base business operating profit and near-target revenue underpinning 93% ACIA payout; watch IPS organic growth trajectory and profit conversion for future ACIA/PSU outcomes .
- Governance quality: Strong say-on-pay approval, independent consultant, anti-hedging/pledging, double-trigger CIC, no tax gross-ups—low governance risk and limited red flags for compensation practices .
- Ownership and alignment: Kelley meets stock ownership guidelines and holds significant vested options; policies reduce misalignment risks; monitor Form 4 filings around vesting dates for potential trading signals .