Zephyr Isely
About Zephyr Isely
Zephyr Isely (age 75) is Co‑President and a director of NGVC, serving on the Board since 1998 and employed by the company since 1969, with multi‑disciplinary operational experience across receiving, warehousing, operations, purchasing, accounting, payroll/compensation, and information systems . NGVC’s pay‑versus‑performance shows cumulative TSR rising from $98.68 to $303.80 on a fixed $100 base from FY2022–FY2024, alongside net income growth from $21.4M to $33.9M, indicating strong recent shareholder value creation and profitability momentum . As a member of the controlling Isely family group and party to the Stockholders Agreement that governs director elections, Zephyr is a non‑independent director and Co‑President in a “controlled company” structure under NYSE rules .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Natural Grocers by Vitamin Cottage, Inc. | Employee across Store Manager; Director of Receiving; Warehouse Manager; Director of Operations; Director of Purchasing; Director of Accounting; Manager of Payroll & Compensation; Director of Information Systems | 1969–present | End‑to‑end operating leadership across supply chain, finance, and IT functions |
| Natural Grocers by Vitamin Cottage, Inc. | Co‑President & Director | 1998–present | Long‑tenured executive and director guiding corporate operations and governance |
Fixed Compensation
| Metric | FY2023 | FY2024 |
|---|---|---|
| Base Salary ($) | 581,044 | 588,000 |
| Bonus ($) | — | — |
| Stock Awards ($) | — | — |
| All Other Compensation ($) | 5,044 | 5,159 |
| Total Compensation ($) | 581,044 | 593,159 |
Performance Compensation
- Zephyr does not participate in NGVC’s cash‑based incentive program; FY2024 discretionary bonuses were limited to other NEOs (Heather Isely, Elizabeth Isely, and the former CFO) .
- NGVC does not maintain a long‑term equity incentive program for family NEOs; no equity awards were granted to Zephyr in FY2024, and historically the committee has not granted option‑like awards .
- No formal performance metrics (e.g., revenue/EBITDA/TSR targets) drive Zephyr’s pay; FY2024 bonuses paid to other NEOs were discretionary, not under a non‑equity incentive plan .
Equity Ownership & Alignment
| As of | Holder | Beneficial Ownership (Shares) | % of Outstanding | Composition | Pledging |
|---|---|---|---|---|---|
| Jan 13, 2025 | Zephyr Isely | 3,258,488 | 14.2% | 3,166,550 directly; 91,938 via LaRock & Luke Isely Trust (co‑trustee with Kemper Isely) | None of the named officers/directors’ shares were pledged as security |
| Jan 13, 2025 | Isely Family Group | 13,324,155 | 58.1% | Voting and transfer limitations under Stockholders Agreement; family controls election of directors | Not indicated as pledged for the named holders |
- Stockholders Agreement: Isely voting group must vote director elections per recommendations of at least three of Kemper, Zephyr, Heather, and Elizabeth Isely; voting proxies submitted five days prior to meetings .
- Sale restrictions: Isely family members are subject to transfer limitations under the Stockholders Agreement; agreement expires when ≥50% of fully‑diluted stock is owned by non‑group members .
- Registration rights: Demand, shelf, and piggyback rights granted to certain Isely family members (13,859,561 shares) with company‑borne registration costs (excluding transfer taxes/underwriting discounts) .
Employment Terms
| Term | Zephyr Isely | Notes |
|---|---|---|
| Employment Agreement | None | No employment agreement in place |
| Severance | None | No contractual severance on termination |
| Change‑of‑Control Cash Benefits | None | No cash entitlements; RSU acceleration terms apply to CFO only |
| Equity Ownership Guidelines (NEOs) | None | Company does not maintain NEO ownership guidelines |
| Clawback/Recoupment | Yes | Policy aligned with Exchange Act §10D and NYSE listing standards |
| Hedging Policy | Pre‑clearance required | Executives must obtain pre‑clearance at least two weeks prior to hedging transactions |
Board Governance
| Attribute | Status | Details |
|---|---|---|
| Board Class & Term | Class II (term expires 2026) | Director since 1998 |
| Independence | Not independent | Employee‑director, party to Stockholders Agreement |
| Committee Memberships | None | Audit and Compensation committees exclude Zephyr |
| Controlled Company | Yes | >50% voting power held by Isely family; exemptions claimed for majority‑independent board and fully independent compensation committee |
| Board Leadership | Chairman is Co‑President (Kemper Isely); no lead independent director | Presiding director for executive sessions is David Rooney |
| Board Attendance | Each director attended ≥75% of meetings in FY2024 | Board met 5 times; 4 executive sessions |
- Director Compensation: Only independent directors receive fees and annual RSU grants (e.g., $40,000 base retainer; additional retainers for committee roles; $60,000 RSU grants in FY2024); management directors like Zephyr do not receive director fees .
Performance & Track Record
| Fiscal Year | Value of Initial Fixed $100 Investment Based on TSR ($) | Net Income ($ Thousands) |
|---|---|---|
| 2022 | 98.68 | 21,365 |
| 2023 | 122.28 | 23,243 |
| 2024 | 303.80 | 33,935 |
- Compensation Actually Paid (CAP) to Zephyr equaled his SCT total due to absence of equity awards, reflecting a predominantly fixed cash pay profile during the period .
Compensation Committee Analysis
- Composition (FY2024): Heather Isely (Chair), Kemper Isely, Edward Cerkovnik, Sandra Buffa; includes executives (Heather and Kemper), thus not fully independent under NYSE standards for non‑controlled companies .
- Consultant usage: FW Cook engaged for an FY2023 study; no consultant engaged for FY2024 decisions; next study expected ahead of the 2027 advisory vote .
- Process: Co‑Presidents provide pay recommendations for executives; committee administers the 2012 Omnibus Incentive Plan .
Related Party Transactions
| Transaction | Counterparty | FY2024 Amount |
|---|---|---|
| Land Trust Lease (1 store) | Entity controlled by Kemper & Zephyr Isely | $0.3 million |
| Chalet Leases (4 stores) | Entity owned by Kemper, Zephyr, Heather, Elizabeth Isely & family | $0.9 million |
| FTVC Lease (1 store) | Entity owned by Isely family members | $0.1 million |
- Governance: Audit committee reviewed/approved related party transactions; leases reflect prevailing market terms at inception per company assessment .
- Control: Isely family can determine outcomes of major stockholder matters and prevent change‑in‑control while maintaining controlling interest .
Say‑on‑Pay & Shareholder Feedback
- 2024 Annual Meeting: Stockholders approved FY2023 NEO compensation on an advisory basis; company adopted a triennial Say‑on‑Pay cadence with the next vote expected in 2027 .
- Company cited “strong stockholder support” and continued compensation structure consistent with past practices .
Investment Implications
- Alignment: Zephyr’s substantial beneficial stake (14.2%) and Stockholders Agreement sale/voting restrictions support long‑term alignment and reduce near‑term insider selling pressure; no pledging disclosed for named holders .
- Pay‑for‑performance risk: Absence of variable or equity‑linked compensation for Zephyr weakens explicit pay‑performance linkage; committee includes executives and operates under controlled company exemptions, increasing governance‑related misalignment risk .
- Retention dynamics: No employment agreement, severance, or change‑in‑control cash protections for Zephyr; however, long‑standing family control and significant ownership suggest low voluntary departure risk in practice .
- Trading signals: Family sale restrictions and lack of pledging lower forced‑sale risk; hedging requires pre‑clearance, moderating short‑term alignment concerns .
- Operational execution: Recent TSR and net income trends are favorable, but related party leases and controlled company governance merit monitoring for potential conflicts and minority shareholder protections .