Todd R. Wahlund
Otter TailAbout Todd R. Wahlund
Vice President and Chief Financial Officer of Otter Tail Corporation effective January 1, 2024; previously CFO & Vice President, Finance of Otter Tail Power Company since 2018, and he has served in roles of increasing responsibility at Otter Tail Power Company and the Corporation for 31 years as of the proxy date . Otter Tail’s annual incentive design for the CFO ties to Corporate EPS and Corporate ROE (plus ESG factors), with both Corporate EPS and Corporate ROE exceeding the maximum in 2024 (200% component payout), indicating a strong pay-for-performance linkage . Company performance context: 2024 net income was $301.662 million with ROE of 19.3%, and Otter Tail’s TSR value from the pay-versus-performance table was 166.28 vs. a peer TSR value of 132.05, framing the operating backdrop for incentive outcomes . Shareholder say-on-pay support was 96.0% at the 2024 annual meeting, signaling broad investor endorsement of the compensation program .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Otter Tail Corporation | Vice President, Chief Financial Officer | 2024–present | Corporate finance leadership, enterprise-level incentive metrics (EPS/ROE) used for CFO AIP |
| Otter Tail Power Company | Chief Financial Officer & Vice President, Finance | 2018–2023 | Finance leadership for the Electric Platform |
External Roles
No external public company directorships were disclosed for Mr. Wahlund in the 2025 proxy statement excerpts reviewed .
Fixed Compensation
| Year | Base Salary ($) | Target Bonus ($) | Target Bonus (% of salary) | Non-Equity Incentive Paid ($) | “Bonus” Paid ($) | Total AIP Paid ($) |
|---|---|---|---|---|---|---|
| 2024 | 415,000 | 207,500 (AIP target) | 50% (207,500 / 415,000) | 364,856 | 29,050 | 393,906 (sum of AIP components) |
Perquisites and other compensation detail (2024):
- 401(k) contribution: $10,350; executive physical: $5,064; gift cards: $865; ERPP contribution: $34,288 (includes $5,401 special ESSRP-freeze offset) .
Performance Compensation
2024 Annual Cash Incentive – Metrics and Payouts
| Metric | Weighting | 2024 Payout vs Target | Notes |
|---|---|---|---|
| Corporate EPS | Not disclosed | 200% of target | Exceeded maximum performance level |
| Corporate ROE | Not disclosed | 200% of target | Exceeded maximum performance level |
| ESG – Safety (Corporate) | Not disclosed | 100% of maximum | Payout 100% of maximum for Corporate Safety |
| ESG – DEI (Corporate) | Not disclosed | 67% of maximum | Payout 67% of maximum for Corporate DEI |
| ESG – Environmental (Corporate) | Not disclosed | 50% of maximum | Payout 50% of maximum for Corporate Environmental |
Design parameters:
- AIP target is expressed as % of base (CFO target = 50% of salary for 2024); combined financial, non-financial and individual performance capped at 200% of target .
2024 Long-Term Incentive (granted Feb 6, 2024)
| Instrument | Grant Date | Shares/Target | Payout Range | Vesting | Performance Metrics |
|---|---|---|---|---|---|
| PSUs | 2024-02-06 | 3,600 target | 0%–150% of target | Cliff at end of 3-year period (committee certifies) | 3-yr TSR vs EEI Index (50%), 3-yr Adjusted ROE (50%) |
| RSUs | 2024-02-06 | 1,200 | N/A | 25% per year over 4 years; full vest upon qualifying retirement | Time-based |
Historical RSUs (pre-CFO role) vesting mechanics:
- 2021, 2022, 2023 RSUs were granted prior to current role and cliff vest 100% at the end of four years (creates concentrated vesting events) .
Stock vested in 2024:
- Shares vested: 550; value realized: $47,861 (fair market value at vesting) .
Outstanding Equity (as of 12/31/2024)
| Grant Year | Unvested RSUs (#) | Market Value ($) | Unearned PSUs at Max (#) | Market/Payout Value at Max ($) |
|---|---|---|---|---|
| 2024 | 1,200 | 88,608 (at $73.84) | 5,400 | 398,736 (at $73.84) |
| 2023 | 600 | 44,304 | — | — |
| 2022 | 460 | 33,966 | — | — |
| 2021 | 600 | 44,304 | — | — |
Notes:
- Fiscal year-end share price used by the company: $73.84 .
- RSU vesting and retirement treatment: time-based RSUs vest ratably over four years; upon qualifying retirement, unvested RSUs fully vest (with proration if retirement on/before June 30 of grant year) .
- PSUs are shown at maximum; actual payout 0%–150% based on certified results .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 11,850 common shares as of 12/31/2024 (under 1% of class) |
| Ownership as % of shares outstanding | ~0.028% (11,850 ÷ 41,827,967 shares outstanding) |
| ESOP holdings (included) | 2,972 shares held via ESOP account (sole voting power, no investment power) |
| Pledging/Hedging | Pledging and hedging prohibited for executives; no pledged shares by any director/executive officer as of 12/31/2024 |
| Ownership guidelines | CFO must hold shares equal to 2x base salary; unvested RSUs count; must hold 100% of net shares from awards until guideline met; all executives were in compliance at proxy date |
Employment Terms
Appointment and Severance Framework
- Appointment: Vice President, Chief Financial Officer effective January 1, 2024 .
- Executive Severance Plan: upon involuntary termination without Cause or resignation for Good Reason, CFO severance equals 1.5× (base salary + target AIP), paid in lump sum; includes covenants (non-disparagement, non-compete, non-solicit, etc.); pro-rata PSUs continue vesting; RSUs forfeited in such terminations unless otherwise specified .
Quantified Termination/CIC Economics (as of 12/31/2024)
| Scenario | Total ($) | Key Components |
|---|---|---|
| Death/Disability | 477,006 | PSUs vest at target: $265,824; RSUs vest: $211,182 |
| Without Cause | 1,000,206 | Severance: $933,750; PSUs continue pro rata (assumed 150% performance): $66,456 |
| Change in Control (double-trigger) | 1,830,400 | Severance: $1,349,032; PSUs at target: $265,824; RSUs vest: $211,182; health benefit: $4,362 |
Retirement acceleration terms:
- RSUs: immediate vesting upon retirement; prorated if retirement on/before June 30 of grant year; otherwise full vest .
- PSUs: continue to vest on schedule with proration if retirement on/before June 30 of grant year; no proration if after .
Clawbacks and restrictive policies:
- SEC- and Nasdaq-compliant Incentive Compensation Recovery Policy (3-year lookback for restatements) .
- Supplemental Incentive Compensation Recovery Policy (adopted Feb 2025) for detrimental misconduct, covering both performance-based and time-vesting awards .
- Hedging and pledging prohibited .
Retirement and Deferred Compensation Benefits (as of 12/31/2024)
| Plan | Credited Service (Years) | Present Value/Balance ($) | 2024 Company Contribution ($) | 2024 Aggregate Earnings ($) |
|---|---|---|---|---|
| Pension Plan | 32.00 | 1,249,737 | — | — |
| ESSRP (frozen) | 27.03 | 388,848 | — | — |
| ERPP (non-qualified DC) – balance | — | 84,103 | 34,288 (incl. $5,401 ESSRP-freeze offset) | 8,216 |
ERPP design highlights:
- Allows deferrals; standard employer contributions of 6.5% of comp above the qualified plan limit plus 3% of annual comp; special additional credit for CFO equals 1% of prior year base + AIP (until retirement or age 62) to offset ESSRP freeze; immediate vesting upon CIC/death/disability; full vest at retirement criteria .
Compensation Structure Analysis
- Cash vs equity mix (2024): Base $415,000; AIP $393,906 combined; equity grant-date fair value $452,016, with performance-heavy mix (PSUs at target 3,600 shares, RSUs 1,200) underpinning alignment with TSR and ROE over three years .
- Shift in instruments: 2021–2023 RSUs (pre-CFO) cliff-vest after four years vs 2024 RSUs vest ratably; PSUs continue to use balanced market (TSR) and financial (Adjusted ROE) metrics with 0–150% payout range .
- Pay governance: High say-on-pay support (96%), independent consultant (WTW) retained by the committee; WTW total fees $473,472 ($171,817 for executive comp advisory; $301,655 for other services with independence protocols) .
Compensation Peer Group and Say‑on‑Pay
- Peer group: No changes from 2023 peer set other than PNM re-named TXNM Energy (EEI Index used for PSU TSR comparisons) .
- Say-on-pay: 96.0% approval at the 2024 annual meeting .
Equity Ownership & Vesting Schedules (Insider Selling Pressure)
| Instrument | Quantity/Status | Vesting Dates/Notes |
|---|---|---|
| RSUs (2024 grant) | 1,200 unvested | 25% annually on approximately Feb 6, 2025/2026/2027/2028 (time-based) |
| RSUs (2023 grant) | 600 unvested | Cliff vest at 4-year mark (grant-year 2023) |
| RSUs (2022 grant) | 460 unvested | Cliff vest at 4-year mark (grant-year 2022) |
| RSUs (2021 grant) | 600 unvested | Cliff vest at 4-year mark (grant-year 2021) |
| PSUs (2024 cycle) | 3,600 target (5,400 max shown outstanding) | 3-year performance cycle; payout 0–150% based on TSR vs EEI Index and Adjusted ROE |
- Vesting concentration: The pre-CFO cliff-vesting RSUs (2021–2023) create lumpy vesting events over 2025–2027, potentially elevating vest-related liquidity needs, while ongoing February ratable RSU vesting also recurs annually .
Investment Implications
- Alignment and incentive sensitivity: The CFO’s annual and long-term incentives are tightly linked to EPS, ROE, and multi-year TSR/Adjusted ROE; 2024 saw EPS and ROE exceed maximums (200% component payout), and equity awards include a 0–150% PSU range, indicating high sensitivity to sustained returns and profitability .
- Retention profile: Moderate severance (1.5× base+target AIP) and not yet retirement-eligible (retirement value $0 in the table), plus meaningful pension/ERPP accruals, support retention; CIC double-trigger severance total of ~$1.83 million further anchors continuity without encouraging voluntary turnover .
- Selling pressure signals: Multiple RSU cliffs (2021–2023 grants) and annual February vest tranches (2024 RSUs) may create periodic Form 4 activity; monitor vest windows, blackout periods, and PSU certification dates for potential flow-through supply .
- Governance and risk controls: Strong say-on-pay, explicit hedging/pledging bans, and robust SEC/Nasdaq-compliant clawback plus a supplemental misconduct recoup policy mitigate governance risk and align executive/shareholder interests .