Michael S. Simmons
About Michael S. Simmons
Michael S. Simmons, age 53, is Vice Chairman of the Board of NL Industries and has served as a director since 2023; he previously served as NL’s Executive Vice President (2022–2023). He is President and CEO of Contran Corporation and Valhi, Inc., and Vice Chairman of Kronos Worldwide and CompX International; he served in accounting/finance roles across the Contran-related group since 2018 after a 24-year career at PwC, most recently as Managing Director (1994–2018) . Under his tenure as director, NL reported FY 2024 revenue of $145.9 million and net income of $67.2 million, compared with FY 2023 revenue of $161.3 million and net loss of $2.3 million, and FY 2022 revenue of $166.6 million and net income of $33.8 million . NL’s TSR (value of $100 initial investment with dividends reinvested) progressed to 271 by 2024 from 177 in 2023, 204 in 2022, 205 in 2021, and 128 in 2020 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NL Industries | Executive Vice President | 2022–2023 | Senior leadership across finance/operations; integration with Contran group . |
| PwC | Managing Director (prior roles since 1994) | 1994–2018 | Led audit/financial advisory; deep financial controls and reporting expertise . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Valhi, Inc. | Vice Chairman; President & CEO; Director | Director since 2022; current executive roles | Oversight of holding company controlling NL; capital allocation and governance . |
| Contran Corporation | President & CEO; Director | Director since 2023; current executive roles | Parent-level leadership; ISA oversight; shared services model . |
| Kronos Worldwide, Inc. | Vice Chairman; Director | Director since 2023; current vice chair | Governance over major affiliate; cross-entity coordination . |
| CompX International Inc. | Vice Chairman; Director | Director since 2022; current vice chair | Manufacturing affiliate oversight; operational alignment . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary (ISA charge allocation across NL group) | $663,000 | $1,320,000 | $1,659,000 |
| Stock awards | $0 | $0 | $0 |
Notes:
- Named executive officers (including Simmons) are Contran employees; NL pays Contran for services via an intercorporate services agreement (ISA) approved annually by NL’s independent directors. ISA charges allocate Contran employment cost (salary, estimated bonus based on prior year, payroll taxes, benefits overhead) by estimated time devoted to NL, Kronos, CompX; amounts are not dependent on NL performance .
- Executives are not eligible for director cash fees or equity for service on NL, Kronos, or CompX boards; Simmons received no director compensation or equity grants from NL .
Breakdown of Simmons ISA fee components:
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| NL portion | $65,000 | $431,000 | $536,000 |
| Kronos Worldwide portion | $369,000 | $727,000 | $932,000 |
| CompX portion | $229,000 | $162,000 | $191,000 |
| Total (equals Salary above) | $663,000 | $1,320,000 | $1,659,000 |
Performance Compensation
- NL does not link executive compensation to specific performance measures; no plan-based awards, options, or equity incentives outstanding for named executive officers, and no grants in 2024 .
- Pay-Versus-Performance disclosure states “we did not use any specific financial performance measures to link executive compensation of our named executive officers to company performance for 2024” .
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| N/A (no disclosed performance-based incentive structure for NL executives) | — | — | — | — | — |
Equity Ownership & Alignment
| Holding | NL Common | Kronos Worldwide Common | Valhi Common | CompX Class A Common |
|---|---|---|---|---|
| Michael S. Simmons beneficial ownership | 0 | 0 | 0 | 0 |
Additional alignment details:
- Stock ownership guidelines: NL has guidelines for non-employee directors only; management/executives have no stock ownership requirements and NL does not anticipate equity grants beyond annual stock to eligible non-employee directors .
- Hedging/pledging: NL has not adopted a hedging policy specific to employees/officers/directors; transactions must comply with NL’s insider trading policy filed as Exhibit 19.1 to the 2024 Form 10-K .
- Options and unvested equity: None outstanding; no option exercises or stock vesting in 2024 for named executive officers .
Employment Terms
- Employer/role structure: Simmons is employed by Contran and provides executive services to NL, Kronos, and CompX under ISAs; quarterly-renewing, fixed-fee arrangements allocate Contran employment costs by time devoted to each entity; fees reviewed by NL’s Management Development & Compensation Committee and approved by independent directors .
- Severance/change-of-control: No NL-specific severance or change-of-control provisions disclosed for Simmons; compensation via ISA is not performance-dependent .
- Clawbacks/gross-ups: Contran absorbs the impact of any Section 162(m) disallowance; amounts above $1.0 million are not deducted by NL for tax purposes, with Contran indemnifying the tax effect .
- Deferred compensation/pension: No nonqualified deferred compensation owed; NL executives do not participate in NL defined-benefit plans; pension plan merger and termination steps relate to NL/Kronos employee plans, not executive participation .
Board Governance
- Board service history: Director and Vice Chairman of NL since 2023 .
- Committee roles: Not listed as a member of NL’s Audit Committee or Management Development & Compensation Committee (current members: Moore Jr. (chair), Harper, Kramer, Mendes) .
- Attendance: “Each of our incumbent directors attended all the board meetings and committee meetings on which he or she served” in 2024 (four board meetings; two written consents; audit committee met seven times; compensation committee met once) .
- Independence: NL is a controlled company (Valhi ~82.7% ownership); independent directors identified as Harper, Kramer, Mendes, Moore Jr.; Simmons is not listed among independent directors .
- Dual-role implications: In 2024, Simmons concurrently served as an NL executive officer and as a director of Contran while serving as an NL director; NL disclosed this context under SEC interlock intent discussion . Board leadership features a non-executive Chair (Loretta Feehan), with independent director sessions presided by the Audit Committee chair; NL does not have a lead independent director .
Compensation Committee Analysis and Say‑on‑Pay
- Committee composition and remit: Independent committee reviews ISA charges, director stock plan, benefit plans; may delegate certain administration to officers .
- Consultants: None engaged by board/committee/management .
- Say‑on‑Pay results: 2024 vote received 87.9% approval; committee maintained compensation approach .
Related Party and Control Considerations
- Control: Valhi held ~82.7% of NL as of record date; Ms. Lisa K. Simmons and the Family Trust may be deemed to control Contran and, indirectly, Valhi and NL via voting arrangements lasting through April 22, 2030 .
- ISAs and fees: NL paid $5.3 million to Contran under ISAs in 2024 and expects $5.7 million in 2025; Kronos $23.7 million (2025E $25.8m), CompX $3.2 million (2025E $3.4m) .
- Risk management and tax sharing: Combined insurance program via Tall Pines, with loss-sharing agreement for exhausted coverage; NL’s participation approved by audit committee; NL tax sharing with Valhi/Contran with indemnity for group tax liability .
Company Performance (context for pay-for-performance)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | $166,562,000 | $161,287,000 | $145,941,000 |
| EBITDA ($) | $32,479,000* | $32,440,000* | $22,504,000* |
| Net Income ($) | $33,844,000 | -$2,308,000 | $67,228,000 |
Values with asterisks retrieved from S&P Global.
Total Shareholder Return (value of $100 initial investment)
| Year | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| NL TSR ($) | 128 | 205 | 204 | 177 | 271 |
| Peer Group TSR ($) (S&P 500 Industrial Conglomerates Index) | 110 | 116 | 106 | 132 | 182 |
Investment Implications
- Alignment risk: Zero beneficial ownership and absence of management ownership guidelines reduce “skin-in-the-game,” while executives receive no NL equity and compensation via Contran ISAs not tied to NL performance (limited pay-for-performance alignment; potential overhang for incentive-driven execution) .
- Retention/trading signals: No disclosed equity awards, options, or vesting schedules, and no director equity grants to executives imply minimal insider selling pressure but also limited retention hooks tied to NL equity; hedging policy not adopted (transactions still governed by insider trading policy) .
- Governance and control: Controlled company status with cross-entity roles (Simmons as Contran/Valhi CEO and NL director) centralizes decision-making; independent committee structures and non-executive chair mitigate but do not eliminate dual-role concerns (particularly on related-party transactions and capital allocation) .
- Performance context: FY 2024 net income rebound and higher TSR support improved shareholder outcomes despite revenue decline; however, lack of performance-linked pay suggests limited direct incentive correlation to NL outcomes under current ISA setup .