Jack Bendheim

About Jack Bendheim

Jack C. Bendheim (age 78) is Chairman, President, and Chief Executive Officer of Phibro Animal Health (PAHC). He joined the company in 1969, has served as a director since 1984, President since 1988, CEO from 1998–2002 and again since March 2014, and controls voting power through BFI Co., LLC, which holds all Class B shares; he has sole voting authority over BFI’s holdings (approx. 90.9% of total voting power; 49.9% total equity interest) . Performance context: FY2025 “Pay vs. Performance” disclosures show net income of $48,264 thousand and Adjusted EBITDA of $183,684 thousand, with cumulative TSR index of 111 over the 2021–2025 window (Company) versus 99 for the peer index .

Past Roles

External Roles

Fixed Compensation

• Employment agreement terms (current): base salary set at $2,442,600 for FY2025; target annual bonus opportunity 50% of base salary, with payout range from 0% (below threshold) to 150% of target based on pre-set goals; employment is at-will (180 days’ notice if terminated without cause by company) . Perquisites include rights to a NY sports team subscription (upon request), use of two company-funded cars (and ability to lease more via fleet), and payments for family legal/audit/tax services, family member non-full-time employment/consulting, and insurance up to an aggregate $550,000 in FY2025 .

Performance Compensation

• MIP structure and payout: target annual incentive equals 50% of base salary for FY2025 (target $1,221,300); FY2025 MIP was earned “in amounts of approximately 137.3% of targets” for NEOs; CEO’s non-equity incentive plan amount was $1,677,300 .
• Performance measures used to link “compensation actually paid”: Adjusted EBITDA, Free Cash Flow, and Net Sales (company-selected performance measures) .

Equity Awards (granted post-FY2025 year-end):

• Options: Company does not currently grant new stock options or SARs; no timing policy applicable given practice .

Equity Ownership & Alignment

• Structure: Each Class B share has 10 votes; Class B is convertible 1:1 into Class A; holders of both classes share dividends equally per share . Jack has sole voting authority over BFI shares and serves as a BFI manager with family members regarding economic rights .
• Hedging/derivatives: Senior Personnel (including directors) are prohibited from engaging in derivative transactions in company equity and must pre-clear trades; insider trading policy filed with FY2025 10-K .
• Pledging: No explicit pledging disclosure found in the proxy; not addressed in the cited sections .
• Ownership guidelines: Not disclosed in the cited sections .

Potential liquidity/selling pressure:

• RSUs granted Aug 2025 vest in three equal annual tranches starting Aug 1, 2026; change-in-control provisions could accelerate vesting under specific conditions, potentially creating event-driven supply, though no sales are implied by the disclosure .

Employment Terms

Retirement and Deferred Compensation Programs (CEO-specific):

• Retirement Income Plan (non-qualified SERP): Annual retirement benefit of $221,901 payable over 15 years after retirement (age ≥65, ≥10 years service); Survivor’s Income Benefit of $1,500,000 (12 monthly installments) .
• Deferred Compensation Benefit: Account balance $1,513,730 as of June 30, 2025; CEO made no contributions in FY2025 and last contributed prior to Item 402 applicability; no above-market earnings .
• Executive Income Program: Additional retirement benefit of $30,000 per year (life for 10 years or 120 monthly payments in total to executive/beneficiaries); pre-retirement death benefit structure via life insurance .

Board Governance (Service history, committees, dual-role implications)

• Board service and leadership: Director since 1984; Board Chairman and CEO; Class III director nominee for term expiring 2028 .
• Committee roles: Audit Committee (Corcoran—Chair, Gejdenson, Wrenn), Compensation Committee (Gejdenson—Chair, Bernal, Wrenn); CEO is not listed as serving on these committees .
• Controlled company: Due to BFI’s voting control, PAHC is a Nasdaq “controlled company” and avails itself of exemptions (e.g., no separate nominating/governance committee); Audit and Compensation Committees comprised of directors determined “independent” under Nasdaq rules .
• Lead Independent Director: The Board does not appoint a lead independent director; independent directors meet in regularly scheduled executive sessions .
• Board/committee attendance: Board met six times in FY2025; each director attended ≥75% of applicable Board/committee meetings .
• Director pay (non-employee): FY2025 cash retainer $40,000 plus $10,000 per committee; increased to $60,000 annual retainer effective Aug 26, 2025 (committee fees unchanged). CEO receives no additional director compensation .

Director Compensation (for completeness)

Policy note: Retainer increased to $60,000 on Aug 26, 2025; committee fees remain $10,000 per committee .

Say‑on‑Pay & Shareholder Feedback

• 2022 say‑on‑pay support was approximately 99%; Compensation Committee made no design changes based on that outcome; next say‑on‑pay vote scheduled at the 2025 Annual Meeting (triennial cadence recommended by Board) .
• Pay philosophy emphasizes at‑risk pay and alignment with stockholder interests; oversight includes use of market surveys (WTW, Mercer) rather than a fixed named peer group for target setting .
• “Pay vs Performance” panel shows PEO compensation actually paid vs. TSR, net income, and Adjusted EBITDA across 2021–2025 .

Related Party Transactions and Other Governance Controls

• Registration rights: BFI (Bendheim family vehicle) holds registration rights, permitting certain registrations of Class A shares (including upon conversion of Class B) under specified conditions .
• Clawback: Board-adopted clawback policy compliant with Exchange Act Section 10D and Nasdaq rules; enables recovery of incentive-based compensation in event of a required financial restatement (3‑year lookback) .
• Insider trading: Pre‑clearance required; prohibition on derivative securities transactions by Senior Personnel .
• Audit Committee: Reviews/approves related-party transactions and oversees risk management; all members independent; financial expert designated .

Performance & Track Record (selected “Pay vs. Performance” data)

Compensation Structure Analysis (signals)

• Mix shift and risk: CEO received no new equity in FY2023–FY2025; 2025 pay was predominantly cash (salary + MIP + discretionary bonus), with modest RSUs granted in Aug 2025 to compensate for no merit increases over a three‑year period—a lower‑beta design buffered by significant founder/family ownership control .
• Discretionary overlay: FY2025 included discretionary cash awards to recognize contributions (e.g., Zoetis asset acquisition, “Phibro Forward” initiatives), which can weaken strict formulaic pay-for-performance linkage if overused .
• Performance targets: Detailed MIP metrics/weights not disclosed, but company identified Adjusted EBITDA, Free Cash Flow, and Net Sales as most important measures; FY2025 bonuses paid at ~137.3% of targets, aligning to improved earnings/EBITDA backdrop .
• Options: Company has not been granting new options/SARs, indicating a preference for RSUs/performance units for alignment and retention .

Risk Indicators & Red Flags

• Control and governance: Single individual serves as CEO and Chair; no lead independent director; company utilizes “controlled company” governance exemptions (e.g., no separate nominating committee) .
• Related-party optics: CEO’s employment agreement includes up to $550,000 for family-related services and arrangements in FY2025; BFI registration rights may facilitate block liquidity under specific circumstances .
• Hedging/pledging: Anti‑derivatives policy mitigates hedging risk; no pledging policy disclosure found in cited sections .
• Succession/tenure: Long-tenured CEO (decades), age 78—succession planning is a governance consideration (Board maintains Corporate Governance Guidelines including succession planning) .

Compensation Committee Analysis (governance quality)

• Composition: Gejdenson (Chair), Bernal, Wrenn; each determined independent under Nasdaq rules despite controlled-company status .
• Process: Uses broad compensation surveys (WTW, Mercer) rather than a fixed named public peer group; retains discretion to balance competitiveness and pay-for-performance .
• Risk review and clawback: Committee reviews risk of comp design (concluded not likely to have a material adverse effect) and administers clawback policy .

Investment Implications

• Alignment via control and ownership: CEO’s effective control (90.9% voting power) and substantial economic stake (49.9% total equity interest) strongly aligns long-term outcomes but reduces minority holder influence; dual role without a lead independent director may warrant a governance discount .
• Pay-for-performance signals: FY2025 MIP payout (~137% of target) and improved net income/Adjusted EBITDA indicate compensation responding to operational progress; discretionary bonuses reflect transactional execution (Zoetis asset acquisition), which can be positive if episodic and tied to value creation .
• Limited severance for CEO: Minimal cash severance exposure in change-in-control or termination scenarios, combined with significant retirement and deferred compensation benefits, reduces “golden parachute” risk but emphasizes retention via role, control, and ownership rather than contractual protections .
• Event-driven supply: RSUs granted in Aug 2025 vest over three years with CoC acceleration mechanics; watch Form 4s and 10b5‑1 filings around vest dates and corporate events for potential selling pressure, noting policy restrictions and lack of explicit pledging disclosures .
• Say‑on‑pay/engagement: Historically very strong support (~99% in 2022); absent adverse outcomes in 2025, investor pushback risk on pay seems low, though governance structure (controlled company, no lead independent director) remains a standing consideration .