Brady Ericson
About Brady D. Ericson
President & CEO of PHINIA; Director since 2023. Age 53; MBA (Duke University) and BS (Kettering University) . Under Ericson’s leadership, PHINIA delivered strong 2024 performance: Adjusted Sales $3,380M, Adjusted EBITDA $478M (14.1% margin), Adjusted Free Cash Flow $253M, and Net Income $79M . Shares appreciated more than 59% in 2024 and PHINIA returned over $256M via dividends and buybacks; a $100 investment since July 5, 2023 was worth $136.62 at 12/31/2024 . Board leadership is separated (Independent Non‑Executive Chair), mitigating dual‑role risks from Ericson’s CEO/director position .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| PHINIA Inc. | President & CEO | 2023–Present | Led standalone strategy, capital returns, new business wins; 2024 stock up >59% . |
| BorgWarner | President & GM, Fuel Systems & Aftermarket | 2022–2023 | P&L and global operations experience directly relevant to PHINIA’s core segments . |
| BorgWarner | President & GM, Morse Systems | 2019–2022 | Global manufacturing and technology leadership . |
| BorgWarner | Chief Strategy Officer | 2017–2019 | Capital allocation, M&A and strategy development . |
| BorgWarner | President, Emissions Systems & BERU Systems | 2011–2016 | Product/operations leadership across global markets . |
| BorgWarner; Honeywell; Remy; Ford | Various exec/managerial roles | 1998–2011; prior | Broad functional and international experience . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Fastenal Company (NASDAQ: FAST) | Director | 2025–Present | Public company board experience . |
| Romeo Power, Inc. (NYSE: RMO) | Director | 2021 | Prior public board . |
| Romeo Systems, Inc. | Director | 2019–2020 | Prior board . |
Board Service & Governance
- Director since 2023; no board committees; not independent due to employment .
- Board leadership split: Independent Non‑Executive Chair (Rohan Weerasinghe) provides oversight; committees are fully independent, supporting checks-and-balances for a CEO-director .
- Attendance: all directors attended at least 80% of 2024 board/committee meetings; executive sessions held after each regular meeting .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 668,750 | 781,250 | 968,750 |
| Year-end Base Rate ($) | — | 875,000 (as of 12/31/2023) | 1,000,000 (effective 4/1/2024) |
| Limited Cash Allowance ($) | — | — | 50,000 |
| Stock Awards ($, grant-date fair value) | 2,028,631 | 5,891,782 | 5,951,898 |
| Non-Equity Incentive ($) | 1,279,800 | 976,500 | 2,050,000 |
| All Other Compensation ($) | 287,661 | 530,511 | 758,975 |
| Total ($) | 4,264,842 | 8,180,043 | 9,729,623 |
Notes:
- CEO target bonus set at 125% of base salary in 2024 (target $1,250,000) .
- Pay mix emphasizes at‑risk compensation; 85% of CEO target comp is performance‑based .
Performance Compensation
Annual Cash Incentive (PHINIA MIP) – 2024 Design and Outcomes
| Metric | Weight | Threshold (50% payout) | Target (100%) | Max (200%) | Actual | Payout as % of Target |
|---|---|---|---|---|---|---|
| Economic Value Added (EVA) ($M) | 50% | 7.709 | 12.314 | 21.525 | 14.9 | 128% |
| Adjusted Free Cash Flow ($M) | 50% | 160 | 180 | 220 | 253 | 200% |
| Total Payout | — | — | — | — | — | 164% |
| CEO Incentive Earned ($) | — | — | 1,250,000 | — | — | 2,050,000 |
- Metrics align to shareholder value creation (EVA, Adjusted FCF); committee discretion up to ±10% was not used for 2024 .
Long-Term Incentives – 2024 Grants and Structure
| Element | Target Value | Instrument | Target Units | Vesting / Performance |
|---|---|---|---|---|
| 2024 LTI (total) | $4,500,000 | 60% PSUs / 40% RSAs | PSUs: 90,574; RSAs: 60,382 | PSUs: 3‑yr (2024–2026) rTSR vs peer group; 50th pct = 100%, 75th = 200%, 25th = 50%; capped at 100% if absolute TSR is negative . RSAs: ratable vest on 2/28/2025, 2/28/2026, 2/28/2027 . |
Compensation governance highlights: rigorous goal-setting; independent consultant (Pearl Meyer); no options granted in 2024; double‑trigger CoC equity vesting; robust clawback; no tax gross‑ups (except limited for international assignments) .
Equity Ownership & Alignment
- Beneficial ownership: 372,897 shares as of the 3/24/2025 record date; <1% of outstanding; none pledged .
- Executive stock ownership policy: CEO must hold 6x base salary; compliance affirmed; pre‑guideline holding requirement of 50% of net after‑tax vested shares .
- Hedging/pledging: Prohibited for directors and Section 16 officers; no margin accounts without exception .
- Clawback: NYSE‑compliant compensation recovery policy applies to erroneously awarded incentive pay .
Unvested Equity and Vesting Cadence (as of 12/31/2024)
| Grant/Type | Unvested Units | Key Vesting Dates/Terms |
|---|---|---|
| 2024 RSAs (+ dividends) | 61,795 | 2/28/2025, 2/28/2026, 2/28/2027 . |
| 2024 PSUs (+ dividends) | 185,388 (reported at max 200%) | Performance period 1/1/2024–12/31/2026; vest in 2027 based on rTSR . |
| 2023 Recognition RSAs | 138,935 | Vest 8/29/2025 and 8/29/2026 . |
| 2023 Replacement RSAs | 12,440; 26,591 | Vest 2/28/2025; and 2/28/2025 & 2/28/2026 respectively . |
| 2023 Replacement RSUs | 53,254 | Vest 12/31/2025 . |
Upcoming vesting events (potential supply): 2/28/2025 (multiple RSA tranches), 8/29/2025 (Recognition RSAs), 12/31/2025 (RSUs), 2/28/2026 (RSA tranches), 8/29/2026 (Recognition RSAs), 2027 (PSUs post-certification) .
Employment Terms
- Change‑of‑Control (CoC) Agreements: Double‑trigger vesting; CEO cash severance = 3x (base + target bonus), pro‑rata bonus, 2x retirement contributions, 18 months welfare benefits, and up to $40k outplacement; cutback (no excise tax gross‑up) .
- Non‑CoC severance: Transition Income Plan provides up to 26 weeks of base salary and COBRA subsidy for restructuring/RIF/position elimination .
- Equity on CoC: If assumed, performance awards convert at target (or greater if specified) and vest on qualifying termination within two years; if not assumed, awards vest at projected actual levels at CoC close .
CoC Economics Illustration (Assuming CoC with qualifying termination, 12/31/2024 prices)
| Component | CEO Amount ($) |
|---|---|
| Pro‑rata annual incentive | 1,250,000 |
| Cash severance (3x base+target bonus) | 6,750,000 |
| PSUs (assumed vest value) | 4,465,070 |
| RSAs (assumed vest value) | 11,549,287 |
| RSUs (assumed vest value) | 2,565,245 |
| Additional retirement benefits | 633,954 |
| Continued health care (18 months) | 39,641 |
| Outplacement services | 40,000 |
| Total | 27,293,197 |
Performance & Track Record (context for pay and alignment)
| Measure | 2023 | 2024 |
|---|---|---|
| PHINIA TSR – value of $100 (since 7/5/2023) | $83.97 | $136.62 |
| Net Income ($M) | 102 | 79 |
| Adjusted Free Cash Flow ($M) | 161 | 253 |
| Adjusted Sales ($M) | — | 3,380 |
| Adjusted EBITDA ($M) | — | 478 |
| Adjusted EBITDA Margin (%) | — | 14.1% |
| Capital returned to shareholders ($M) | — | >256 |
Say‑on‑pay support was approximately 93% in 2024; target pay positioning around median (50th percentile) of a defined industrial/auto peer set .
Compensation peer group (benchmarking): Allison Transmission; American Axle; Autoliv; Cooper‑Standard; Dana; Dorman; Dover; Fortive; Fox Factory; Garrett Motion; Gentex; LCI; Modine; Oshkosh; Sensata; Standard Motor Products; Superior Industries; The Timken Company; Visteon .
Risk Indicators & Red Flags
- Hedging/pledging prohibited; no shares pledged; clawback policy in place .
- Double‑trigger CoC; no excise tax gross‑ups; no single‑trigger severance; option repricing not applicable (no options granted) .
- Related party transactions: none disclosed involving Ericson; Company disclosed one immaterial related‑party employment relationship involving CFO’s spouse (oversight by Governance Committee) .
- Legal proceedings: none adverse involving directors/executives disclosed .
- CEO pay ratio 2024: 477:1 (contextual governance metric) .
Compensation Committee & Governance Notes
- Compensation Committee: Roger J. Wood (Chair), Samuel R. Chapin, Latondra Newton; independent; advised by Pearl Meyer (independent consultant) .
- Metrics tied to value creation: annual (EVA, Adjusted FCF), long‑term (relative TSR) .
- Strong governance: separated Chair/CEO; independent committees; stock ownership guidelines for execs and directors; prohibition of speculative trading and pledging .
Director Compensation (Ericson as Director)
- Ericson receives no additional compensation for board service; director retainers/equity apply only to non‑employee directors .
Investment Implications
- Alignment: High at‑risk mix (85% CEO), rigorous financial/TSR metrics, robust ownership requirements, and clawback support pay‑for‑performance; strong say‑on‑pay (93%) reduces governance overhang .
- Vesting overhang/trading signals: Multiple 2025–2027 vesting dates (2/28/2025, 8/29/2025, 12/31/2025, 2/28/2026, 8/29/2026, and 2027 PSU certification) may create episodic supply/insider selling pressure; monitoring Form 4s around these dates is prudent .
- Retention/CoC risk: CEO protected by 3x CoC multiple and double‑trigger vesting—stabilizing in strategic transactions but increasing deal‑related cost; non‑CoC severance modest (26 weeks) .
- Execution track record: Strong 2024 cash generation and capital returns under Ericson bolster confidence; EVA/FCF outperformance drove a 164% annual bonus payout, aligning comp with results .
- Governance mitigants: Independent chair and fully independent committees help counterbalance CEO/director dual role; no hedging/pledging reduces alignment risk .