Hugo Gonzalez
PATRICK INDUSTRIESAbout Hugo Gonzalez
Hugo E. Gonzalez is Executive Vice President — Operations and Chief Operating Officer of Patrick Industries (appointed EVP Operations January 2024; elected COO May 2024). He joined Patrick in 2007 via the Adorn Holdings acquisition and progressed through operations leadership across RV, manufactured housing, and marine. He was born in 1981 and attended Bethel College. Company performance metrics relevant to his pay-for-performance plan include adjusted FY2024 net income of $150.2M, EBITDA of $425M, and TSR tracking disclosed in the Pay vs. Performance table.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Patrick Industries | Chief Operating Officer | May 2024 – Present | Oversees enterprise operations across RV, MH, marine; execution of cost structure flexibility and diversification strategy. |
| Patrick Industries | EVP — Operations | Jan 2024 – May 2024 | Led enterprise operations; aligned STIP/LTIP metrics to net income and 3-year EBITDA. |
| Patrick Industries | SVP — RV Operations | Jul 2021 – Jan 2024 | P&L leadership in RV end-market; drove operational efficiencies through cycle. |
| Patrick Industries | Group VP — Operations | Feb 2020 – Jun 2021 | Multi-unit operations oversight; integration and process improvement. |
| Patrick Industries | Business Unit Director | Feb 2017 – Jan 2020 | Unit-level leadership; manufacturing execution. |
| Adorn Holdings (acquired by PATK) | Plant Manager (RV business unit) | Pre-2007 – 2007+ | Led plant operations; transitioned into PATK post-acquisition. |
External Roles
No external public company directorships or committee roles for Gonzalez are disclosed in the 2025 DEF 14A biography.
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $350,000 | $470,000 (+34%) |
| All Other Compensation ($) | — | $25,300 (401k match $13,800; auto/HSA/health club $11,500) |
- Perquisites provided broadly to executives: auto allowance, HSA contributions, health club reimbursement; no separate executive benefit plans beyond standard employee programs.
- Insider trading policy includes blackout beginning 14 days before quarter-end until first full trading day post-earnings release.
Performance Compensation
Short-Term Incentive (STIP) – FY2024
Design: 70% Company adjusted net income; 30% individual strategic objectives; payout range 0–200% with threshold/target/stretch levels.
| Component | Target | Actual | Weighting | Payout Outcome |
|---|---|---|---|---|
| Adjusted Net Income (net of 2024 acquisitions) ($M) | $153.4 | $150.2 | 70% | 98% of target contributes to overall payout |
| Individual Performance Rating (0–5) | 3.5 | Not disclosed (company-wide distribution) | 30% | Incorporated into actual payout |
| Target STIP Award ($) | $880,000 | — | — | — |
| Actual Payout ($) | — | $921,360 (105% of target) | — | 105% overall |
Key features:
- Threshold payout at 75% of plan (50% of target); maximum at 115% of plan (200% of target).
- Individual ratings threshold 2.5; maximum 5.0 with same 50%–200% scale.
Long-Term Incentive (LTIP) – 2024 Grant Structure (RSUs)
Design: 80% performance-contingent RSUs based on 3-year cumulative EBITDA (2024–2026); 20% time-based RSUs with 3-year cliff vest; payout 50%–200% vs EBITDA thresholds.
| Grant Date | Target Award ($) | Time-Based Shares | Performance-Contingent Shares | Grant Fair Value ($) |
|---|---|---|---|---|
| Jan 24, 2024 | $900,000 | 2,843 | 11,369 | $943,584 |
Performance schedule (Performance-Contingent RSUs):
- Threshold 80% of plan = 50% payout; Target 100% = 100% payout; Stretch 110% = 150%; Max 120% = 200%.
Equity Ownership & Alignment
Beneficial Ownership
| Holder | Shares Beneficially Owned | % of Class |
|---|---|---|
| Hugo E. Gonzalez | 43,629 | <1% |
- Stock ownership guidelines: multiple of base salary required; Gonzalez at 2x base salary ($470,000) → required share value $940,000; all NEOs exceeded guideline as of 12/31/2024.
- Hedging: company permits hedging transactions; no holding/retention periods beyond vesting for stock-based grants.
- Pledging: no pledging disclosures specific to Gonzalez; not addressed in proxy beyond hedging policy.
Outstanding Unvested Equity (as of 12/31/2024)
| Grant | Unvested Time-Based Shares | Market Value ($) | Unvested Performance-Contingent Shares | Market/Payout Value ($) |
|---|---|---|---|---|
| 2024 LTIP (1/24/2024) | 2,843 | $236,196 (at $83.08) | 11,369 | $944,537 (at $83.08) |
| 2023 LTIP (1/25/2023) | 1,500 | $124,620 | 6,000 | $498,480 |
| 2022 LTIP (1/26/2022) | 1,200 | $99,696 | 4,800 | $398,784 |
- No options/SARs outstanding as of 12/31/2024; Gonzalez exercised 7,313 options in 2024 for $429,634 value; 7,425 stock awards vested in 2024 for $471,014 value.
- Form 4 activity: reported gift of 1,780 shares on 08/19/2025 (no open-market selling signal).
Upcoming Vesting and Potential Selling Pressure
| Award Type | Grant Date | Vest Terms | Key Dates |
|---|---|---|---|
| Time-Based RSUs | Jan 24, 2024 | 3-year cliff | Jan 24, 2027 |
| Time-Based RSUs | Jan 25, 2023 | 3-year cliff | Jan 25, 2026 |
| Time-Based RSUs | Jan 26, 2022 | 3-year cliff | Jan 26, 2025 |
| Performance RSUs | 2024 LTIP | Earn on 3-year EBITDA (2024–2026) | Payout certified after 12/31/2026 |
Tax-withholding sales can occur at vest; equity accelerates fully on change-of-control (single-trigger).
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement | Gonzalez is party to an executive employment agreement. |
| Severance (without cause) | 12 months base salary plus annual non‑equity incentive compensation he would have been entitled to (pro‑rated if termination mid‑year). Paid bi‑weekly for salary; STIP per plan timing. |
| Death/Disability | Base salary through month-end; pro‑rated STIP eligibility per plan. |
| Restrictive Covenants | Non‑compete for two years post‑termination; other covenants apply with exceptions. |
| Equity Treatment — Termination w/o Cause | Time-based RSUs fully vest; performance RSUs continue to vest subject to performance criteria through award end date. |
| Equity Treatment — Change of Control | All unvested performance RSUs vest at target immediately (single-trigger); time-based RSUs fully vest. |
| Illustrative Benefits (as of 12/31/2024) | Termination without cause or change-of-control: Base $470,000; LTIs acceleration value $2,302,313; STIP $921,360 → Total ~$3.694M. |
| Scenario | Base Salary ($) | Accelerated LTIs ($) | STIP ($) | Total ($) |
|---|---|---|---|---|
| Termination without Cause | 470,000 | 2,302,313 | 921,360 | 3,693,673 |
| Change of Control | 470,000 | 2,302,313 (performance RSUs assume target) | 921,360 | 3,693,673 |
| Death/Disability | — | 2,302,313 | 921,360 | 3,223,673 |
Clawback policy implemented in 2023; insider trading policy updated in 2024.
Performance & Track Record (Company Context)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Income ($M) | 97 | 225 | 328 | 143 | 138 |
| EBITDA ($M) | 247 | 457 | 627 | 405 | 425 |
| Company TSR (Index $100 start) | 133 | 159 | 122 | 207 | 262 |
- 2024 strategic focus: powersports acquisition (Sportech), aftermarket expansion (RecPro), opportunistic debt refinancing to extend maturities and reduce fixed-rate costs; positioned for recovery in end markets.
- Say‑on‑Pay support: ~95% approval at May 16, 2024 meeting for FY2023 NEO compensation.
Compensation Structure Observations
- Increased fixed pay for Gonzalez with promotion (base moved from $350k to $470k; +34%).
- High variable mix: STIP target at ~187% of base, LTIP target at ~191% of base; variable pay drives alignment to net income and EBITDA.
- Shift to RSUs over options: no options/SARs granted 2022–2024; LTIP fully in RSUs (80% performance; 20% time-based).
- Ownership alignment: 2x salary guideline met/exceeded; hedging permitted; no director ownership guidelines but executive ones enforced.
Risk Indicators & Red Flags
- Single-trigger acceleration on change-of-control for performance RSUs (vest at target), which can reduce retention incentives post‑deal.
- Hedging permitted by policy (can weaken alignment); no pledging disclosure specific to executives.
- No tax gross-ups disclosed; clawback policy in place (mitigates risk).
Compensation Peer Group (Benchmarking)
Peer companies used for executive benchmarking include American Woodmark, Apogee, Brunswick, Cavco, EnPro, Hyster‑Yale, LCI Industries, Modine, Mueller, Polaris, Thor, UFP, Wabash, Winnebago.
Equity Ownership & Insider Activity Signals
- 2024 vesting and 2025–2027 cliff dates create predictable RSU events; potential sales for withholding and diversification at vest dates.
- Reported Form 4 gift (not sale) by Gonzalez in Aug 2025; no open-market selling pressure indicated by that transaction.
Investment Implications
- Strong pay-for-performance linkage to net income and multi‑year EBITDA should reinforce operational execution focus; Gonzalez’s remit over operations places him directly on the levers tied to incentive payouts.
- Upcoming RSU vesting (2025–2027) and single‑trigger change‑of‑control acceleration suggest potential episodic supply from vest-related transactions, though 2025 Form 4 shows gifting rather than selling.
- Retention risk appears moderate: severance at 1x base + STIP, two‑year non‑compete, and sizeable unvested performance RSUs tied to EBITDA through 2026 likely anchor tenure.
- Hedging allowance is a governance negative for alignment; however, stock ownership guidelines met/exceeded mitigate that concern.