Timothy M. French
About Timothy M. French
Timothy M. French is Senior Vice President and Chief Operating Officer of NN, Inc., appointed effective August 10, 2023; he is 60 and holds an MBA from Athabasca University, with 35 years of manufacturing and operations experience leading transformations in restructuring, lean, and post‑M&A integration . He leads NN’s global operations and is incented on Company EIC metrics of Adjusted EBITDA, Free Cash Flow, and New Business Wins; in 2024 NN achieved $49.01M Adjusted EBITDA vs $49.19M target, $7.30M Free Cash Flow vs $11.23M target, and $72.91M in New Business Wins vs $65.00M target, driving his 2024 bonus payout at 78.7% of target . His compensation is anchored by 2023 inducement equity grants of 330,000 time-vesting RSUs (20% annually through 2028) and 560,000 PSUs earned in 70,000‑share blocks upon stock price hurdles from $4 to $11 and vesting at the five-year mark .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Synergein Solutions Limited | President & CEO | Pre-2023 (disclosed at appointment) | Interim C‑suite management and operational due diligence for PE; led manufacturing company transformations |
| Multiple manufacturing firms | COO/CEO | Last 13 years (pre-2023) | Led operational restructuring, lean, post‑M&A integration; improved efficiency, costs, capital management |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Frankston Packaging Limited (KLH Capital portfolio) | Board member | Disclosed as of Aug 2023 | Board oversight; disclosed as not a conflict under Employment Agreement |
| Trafalgar Industries | Board member | Disclosed as of Aug 2023 | Board oversight; disclosed as not a conflict under Employment Agreement |
| French Industries Limited (Kahuna Surf Shop & French’s Stand) | Owner | Disclosed as of Aug 2023 | Personal business interests disclosed |
| French Properties Limited | Owner | Disclosed as of Aug 2023 | Personal business interests disclosed |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary (USD) | $450,000 | $450,000 (paid in CAD, presented in USD) |
| Base Salary (CAD) | $594,000 CAD at start; USD/CAD 1.32 (for initial calc) | Reviewed annually, participation in EIC program |
| Target Annual Bonus (% of Base) | 50% | 50% |
| All Other Compensation (USD) | $9,499 | $10,398 (benefits stipend in lieu of company plans) |
| Total Compensation (USD) | $2,307,285 | $614,539 |
Performance Compensation
| Metric | Weighting | Threshold | Target | Maximum | 2024 Actual | Payout Mechanics |
|---|---|---|---|---|---|---|
| Adjusted EBITDA (USD mm) | 40% | $41.81 | $49.19 | $56.57 | $49.01 | Linear between levels; gate requires FCF ≥$9.0M or EBITDA ≥$41.8M |
| Free Cash Flow (USD mm) | 30% | $8.98 | $11.23 | $13.47 | $7.30 | Linear between levels; gate as above |
| New Business Wins (USD mm) | 30% | $52.00 | $65.00 | $78.00 | $72.91 | Linear between levels |
| French EIC Target (% of Base) | — | — | 50% | — | — | Payout level 78.7%; Award $170,521 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Mar 17, 2025) | 330,000 shares; less than 1% of class |
| Shares Outstanding (record date) | 49,869,511 |
| Stock Ownership Guidelines | Section 16 officers: 3× base salary requirement; Company reports compliance except Ms. Nixon (waiver) |
| Anti‑hedging/pledging | Hedging prohibited; pledging requires CEO/GC approval; no pledges by NEOs to date |
| Outstanding Equity (12/31/2024) | RSU Inducement Unvested: 264,000 ($863,280 market value at $3.27) ; PSU Inducement Unvested: 560,000 ($1,831,200 assuming target) |
| 2024 Vesting/Realization | RSUs vested: 66,000; value realized $221,100 |
| Inducement RSUs (Grant 8/10/2023) | 330,000; vest 20% on each Aug 10, 2024–2028 |
| Inducement PSUs (Grant 8/10/2023) | 560,000; earned in 70,000 blocks when 20‑day average stock price meets $4, $5, …, $11; five‑year cliff vest on 8/9/2028 (with death/disability/COC exceptions) |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | Effective Aug 10, 2023 with NN Canada, Inc.; governs compensation, benefits |
| Role & Duties | COO; oversees strategic plan execution, financial/operating performance, and operations leadership |
| Contract Term | Indefinite; terminable per Separation Agreement |
| Non‑compete | 12‑month Restricted Period post‑termination; Territory: North America; prohibits competing in Business and soliciting customers/employees |
| Non‑solicit | 12‑month prohibition on soliciting customers and employees |
| Garden leave | Not specified; Company may waive working notice while paying during resignation notice period |
| Post‑termination cooperation | $125/hour for cooperation in proceedings after employment ends |
| Severance (no COC) | Lump sum 1.5× base salary; continuation of benefits/payments during statutory notice; vested rights per award agreements |
| Double‑trigger COC | Lump sum 1.5× base salary + 1.5× target bonus; continuation of benefits/statutory items; vesting per award agreements |
| COC Quantification (as of 12/31/2024) | Cash Severance $975,645; RS acceleration $863,280; PSU acceleration $228,900; Total $2,067,825 |
| Clawback | Company‑wide incentive compensation recoupment policy; RSU/PSU agreements include clawback references |
| EIC Gate | 2024 payout gated by FCF ≥$9.0M or EBITDA ≥$41.8M |
| Say‑on‑Pay | 2024 approval ~87% for FY2023 NEO pay |
| Related Party Transactions | None reported |
| Section 16(a) Compliance | No delinquencies reported for 2024 |
Performance Compensation Details
| Award Type | Structure | Weighting/Targets | Vesting |
|---|---|---|---|
| Annual EIC | Corporate financial metrics only (Adjusted EBITDA 40%; Free Cash Flow 30%; New Business Wins 30%); maximum payout 150% of target; gate on FCF/EBITDA | Target award 50% of base salary for French | Paid post‑audit; French 2024 payout $170,521 at 78.7% |
| RSU Inducement | 330,000 time‑vesting RSUs; designed for retention and alignment; replaces annual LTI through 2027 | N/A | 20% annually on Aug 10 each year 2024–2028 |
| PSU Inducement | 560,000 PSUs; earned upon sustained 20‑day average stock price hurdles ($4–$11), no interpolation; five‑year cliff vest; additional six‑month earning window on Qualifying Termination and COC treatment per agreement | N/A | Cliff vest at 8/9/2028; special vesting upon death/disability/COC/Qualifying Termination per agreement |
Investment Implications
- Alignment and leverage: Five‑year PSU design tied to sustained stock price hurdles directly aligns French with shareholder TSR; RSU cadence through 2028 enhances retention while limiting annual equity grants until 2028 .
- Pay-for-performance rigor: 2024 EIC gate and weighting drove a sub‑target payout (78.7%) amid FCF underperformance and EBITDA near target, indicating compensation sensitivity to cash generation and profitable growth .
- Change‑of‑control economics: Double‑trigger severance of 1.5× salary and bonus plus equity acceleration totals ~$2.07M at 12/31/2024 values, implying moderate COC costs and clear vesting treatment for price‑based PSUs under COC scenarios .
- Ownership and governance: Beneficial ownership of 330,000 shares, compliance with 3× salary ownership guidelines, and prohibitions on hedging/pledging reduce misalignment and pledging risk; no related‑party transactions reported .
- Execution risk: Annual FCF shortfall versus target and continued net losses in 2024 emphasize operational cash discipline as a key lever for future payouts; new business wins above target support growth trajectory but require conversion to cash and margins .