Paul Cornett
Quanex Building ProductsAbout Paul Cornett
Paul B. Cornett, age 47, is Senior Vice President – General Counsel & Secretary at Quanex Building Products, effective November 1, 2019; he previously progressed through legal roles at Quanex since joining in 2005, after starting his career as an associate at Fulbright & Jaworski (now Norton Rose Fulbright). He holds a B.A. from Rice University and a J.D. from the University of Chicago Law School . Long-term incentive outcomes for the 2022–2024 cycle reflect corporate performance: RONA achieved 17.5% vs. a 17.4% target (103% payout), and absolute TSR was 48.3% (147% payout), indicating pay-for-performance linkage through returns and shareholder value creation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Quanex Building Products | SVP – General Counsel & Secretary | 2019–present | Executive legal leadership overseeing governance and securities compliance |
| Quanex Building Products (predecessor) | Staff Attorney; various roles incl. Deputy General Counsel | 2005–2019 | Advanced through increasing responsibility; supported corporate and securities matters |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Fulbright & Jaworski (now Norton Rose Fulbright) | Associate (Corporate & Securities) | 2003–2005 | Advised clients on corporate and securities matters |
Fixed Compensation
Multi-year compensation (Summary Compensation Table):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 375,000 | 415,000 | 450,000 |
| Stock Awards ($) | 311,814 | 305,832 | 363,220 |
| Non-Equity Incentive Plan Compensation ($) | 596,627 | 561,103 | 545,410 |
| All Other Compensation ($) | 19,120 | 23,763 | 31,011 |
| Total ($) | 1,302,561 | 1,305,698 | 1,389,641 |
- Base salary increased from $415,000 (FY2023) to $450,000 (FY2024), an 8% increase, as part of aligning compensation to market median .
Performance Compensation
Annual Incentive (AIA) – FY2024 payout and FY2025 design:
- FY2024 AIA result: Target 60% of salary; achieved 90% of target; payout equal to 54% of salary . FY2024 AIA cash paid: $241,750 .
- FY2025 AIA metrics/weights: 25% Revenue, 25% EBITDA, 25% Adjusted EBITDA Margin, 25% Run-Rate Synergy Targets related to the Tyman acquisition .
AIA detail (FY2024):
| Metric | Target (% of Salary) | Achieved (% of Target) | Payout (% of Salary) |
|---|---|---|---|
| AIA (Short-Term Incentive) | 60% | 90% | 54% |
Long-Term Incentive (LTI) structure and grants:
- FY2024 LTI target value (Cornett): $550,000 .
- LTI mix (FY2024 cycle): 40% performance shares (RONA), 30% PRSUs (Absolute TSR), 30% restricted stock; 70% performance-based .
FY2024 LTI grants (grant date 12/7/2023):
| Component | Grant Date | Quantity | Grant Date Fair Value ($) |
|---|---|---|---|
| Restricted Stock | 12/7/2023 | 6,200 | — |
| PRSUs (Absolute TSR) | 12/7/2023 | 5,400 | — |
| Performance Shares (RONA, cash-settled) | 12/7/2023 | 8,200 | — |
| Total Stock Awards Fair Value | 12/7/2023 | — | 363,220 |
Performance outcomes for the 2022–2024 cycle (awarded Dec 2021; settled Dec 2024):
| Award Type | Metric | Target | Actual | Payout (% of Target) | Shares Granted | Shares Earned | Cash/Dividends |
|---|---|---|---|---|---|---|---|
| Performance Shares | RONA | 17.4% | 17.5% | 103% | 9,600 | 9,888 | $209,376 |
| PRSUs | Absolute TSR | Minimum 20% to pay target | 48.3% | 147% | 7,100 | 10,437 | $10,854 (dividends) |
Vesting schedules:
- Restricted stock awards vest three years from the date of grant; PRSUs vest after a three-year performance period assuming at 100% of target for modeling; market value references use $29.06 on Oct 31, 2024 .
Equity Ownership & Alignment
Beneficial ownership (Record Date; less than 1% of shares outstanding individually):
| Component | Quantity | Percent of Outstanding |
|---|---|---|
| Common Stock Owned of Record | 58,599 | <1% |
| Phantom Common Stock (Deferred Comp Plan) | 2,490 | <1% |
| Options (exercisable within 60 days) | 5,500 | <1% |
| Total | 66,589 | <1% |
Outstanding unvested equity (as of Oct 31, 2024):
| Grant Year | Restricted Stock (#) | PRSUs (#) | Total Unvested (#) | Market Value ($) |
|---|---|---|---|---|
| 2021 (12/9/2021) | 7,200 | 7,100 | 14,300 | 415,558 |
| 2022 (12/7/2022) | 7,300 | 6,500 | 13,800 | 401,028 |
| 2023 (12/7/2023) | 6,200 | 5,400 | 11,600 | 337,096 |
Options and recent activity:
- Options exercisable: 5,500 at $19.45 strike, expiring 11/30/2026; historical options vested annually in equal installments on 11/30/2017, 2018, 2019 .
- FY2024 exercises/vesting: Exercised 7,300 options (value realized $121,937); 5,000 shares vested from stock awards (value realized $125,850) .
Ownership alignment policies:
- Executive stock ownership guidelines: SVP level = 2x base salary; all named executive officers are currently in compliance .
- Hedging/pledging: Corporate Governance Guidelines prohibit hedging/pledging, margin accounts, and derivative trading in company stock; no director or officer has pledged any shares .
Employment Terms
Severance policy tier and multiples:
| Tier | Qualifying Termination (No Change in Control) | Qualifying Termination Following Change in Control |
|---|---|---|
| Tier 2 (Cornett) | 1.5x base salary + 1.5x target annual bonus; pro-rata bonus; 18 months health/welfare benefits (installments) | 2x base salary + 2x target annual bonus (or higher at time of CIC); pro-rata target bonus; 18 months health/welfare benefits (lump sum within 15 days) |
Post-employment scenarios (assumed termination on Oct 31, 2024):
| Scenario | Severance Payment ($) | Pro-rated Bonus ($) | RS/RSUs ($) | Performance Shares ($) | PRSUs ($) | Health & Welfare ($) | Total Benefit ($) |
|---|---|---|---|---|---|---|---|
| Involuntary without Cause | 1,079,152 | 241,750 | — | — | — | 42,569 | 1,363,471 |
| Change in Control (no termination) | — | 269,435 | 615,110 | 825,844 | 730,331 | — | 2,440,719 |
| Termination after Change in Control | 682,017 | 269,435 | 615,110 | 825,844 | 730,331 | 42,569 | 3,165,305 |
| Death/Disability | — | 241,750 | 615,110 | 817,198 | 564,844 | — | 2,238,902 |
Other terms:
- Incentive recoupment (clawback): Company may recover performance-based bonuses following material restatements; SOX 304 reimbursement for CEO/CFO as applicable; hedging/pledging prohibited .
- Deferred compensation: Eligible executives may defer AIP/AIA and Omnibus Plan compensation; Cornett holds phantom common stock units under the Deferred Compensation Plan .
- Administrative signatory: Cornett frequently signs current reports on behalf of the registrant, reflecting his officer responsibilities .
Investment Implications
- Strong pay-for-performance alignment: LTI outcomes tied to RONA and absolute TSR paid out near/above target (RONA 103%, TSR 147%), suggesting incentives driven by returns and shareholder value rather than discretionary adjustments .
- Upcoming STI design adds integration execution risk/reward: FY2025 AIA introduces explicit synergy targets alongside revenue/EBITDA/margin, tightly linking cash bonus outcomes to Tyman integration cadence—positive for alignment, but raises execution sensitivity .
- Potential near-term selling pressure windows: Unvested tranches from 2021–2023 grants vest on a three-year schedule (e.g., 12/9/2021 cycle completed; 12/7/2022 vesting in late 2025; 12/7/2023 vesting in late 2026), and remaining in-the-money options expiring 11/30/2026 could prompt periodic sales around vest/expiry dates .
- Retention economics are competitive: Tier 2 severance (up to 2x salary+bonus on CIC termination) plus meaningful unvested equity likely lowers near-term voluntary departure risk, enhancing continuity through integration .
- Governance risk mitigants: Ownership guideline compliance, clawback policy, and prohibition on hedging/pledging reduce misalignment and governance red flags; no pledging by officers recorded .