Chris Gropp
About Chris Gropp
Chris P. Gropp (age 59 as of Feb 28, 2024) is PHINIA’s Vice President and Chief Financial Officer, appointed at the July 2023 spin-off; she serves as principal financial officer, signing SOX 302/906 certifications across PHINIA’s 10-K/10-Qs in 2024–2025 . PHINIA’s pay-versus-performance disclosures show 2024 total shareholder return of $136.62 per $100 initial investment, net income of $79 million, and adjusted free cash flow of $253 million, with peer group TSR at $95.99, reflecting strong shareholder value creation and cash generation used directly in NEO incentive design . Annual incentives for 2024 were tied 50/50 to EVA and Adjusted Free Cash Flow, with CFO payout at 164% of target based on $14.9M EVA and $253M adjusted FCF results . In Q3 2025, PHINIA’s net sales rose 8% year-over-year to $908M (from $839M), with gross profit of $200M and net earnings of $13M for the quarter, highlighting ongoing operational momentum into 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| BorgWarner | Vice President of Finance, Fuel Systems and Aftermarket | 2020–July 2023 | — |
| BorgWarner | Vice President of Finance, Transmission Systems | 2014–2020 | — |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | — |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 337,033 | 423,996 | 526,250 (SCT paid) |
| Annual base salary rate at year-end ($) | — | 500,000 | 535,000 (effective Apr 1, 2024) |
| Target annual incentive (% of base) | — | — | 70% |
| Target annual incentive ($) | — | — | 374,500 |
| Actual annual incentive payout ($) | 189,832 | 325,500 | 614,180 |
| Bonus ($, discrete) | — | 169,752 | — |
Perquisites and deferred comp (selected line items, 2024):
- Limited Cash Allowance: $35,000
- PHINIA Retirement Savings Plan contributions: $40,550
- PHINIA Excess Plan contributions and year-end balance: $71,410 contribution; $596,293 aggregate balance
- Dividends accrued on unvested awards: $77,235
Performance Compensation
Annual Cash Incentive (PHINIA MIP) – 2024
| Metric | Weight | Threshold (50% payout) | Target (100%) | Max (200%) | Actual | Payout vs Target |
|---|---|---|---|---|---|---|
| EVA ($M) | 50% | 7.709 | 12.314 | 21.525 | 14.9 | 128% |
| Adjusted Free Cash Flow ($M) | 50% | 160 | 180 | 220 | 253 | 200% |
| Total payout (% of target) | — | — | — | — | — | 164% (CFO earned) |
Notes:
- Committee discretion +/-10% was available but not applied for 2024 payouts .
Long-Term Equity Incentives (granted Feb 16, 2024)
| Instrument | Weight | Target Value | Units at Target | Performance Metric | Vest/Performance Period | Settlement |
|---|---|---|---|---|---|---|
| PSUs | 60% | $1,000,000 | 20,127 | Relative TSR (peer group), 25th/50th/75th percentile = 50%/100%/200% (cap at 100% if absolute TSR negative) | 2024–2026; earned Q1 2027 | Shares |
| Time-based RSAs | 40% | $1,000,000 | 13,418 | Service-based | Vests ratably on Feb 28, 2025/2026/2027 | Shares |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Mar 24, 2025) | 71,199 shares; less than 1% of outstanding |
| Restricted shares included | 53,131 (includes 2,894 restricted shares held by spouse; disclaimed) |
| Shares pledged as collateral | None (company prohibits pledging) |
| Hedging policy | Hedging, short sales, and derivative transactions prohibited |
| Ownership guideline | CFO must hold 3× base salary; compliance due within 5 years of appointment |
| Compliance status | Each NEO is in compliance with ownership guidelines |
Outstanding equity (Dec 31, 2024):
- Unvested RSAs: 13,732 shares; market value $661,470 at $48.17 closing price
- Unearned PSUs (max reporting): 41,196 units; market/payout value $1,984,411 at 200%
- 2023 recognition RSAs: 29,888; vest Aug 29, 2025 and Aug 29, 2026
- 2023 replacement RSAs: 4,151 vest Feb 28, 2025; 8,712 vest Feb 28, 2025 and Feb 28, 2026
Insider equity flows and withholding:
- Company withholds shares for employee tax on vesting; Q3 2025 employee transactions: 55,789 shares in Aug, 268 shares in Sep (average prices $58.48 and $58.20, respectively) .
Employment Terms
| Provision | Key Terms |
|---|---|
| Change-of-Control (CoC) agreements | Double-trigger vesting; employment period runs 2 years post-CoC; base salary cannot be reduced during period; at least target bonus eligibility; participation in broad-based incentives/benefits; reimbursement and fringe benefits continuation |
| Cash severance (CoC termination w/o cause or for good reason) | 2× (base salary + target bonus) for CFO |
| Other CoC benefits | Pro rata target bonus for year of termination; 2× company retirement/matching contributions; continued medical/dental/life benefits for 18 months; outplacement up to $40,000; no excise tax gross-ups; cutback if beneficial |
| Equity treatment in CoC | If awards assumed/replaced by acquiror: no single-trigger vest; performance goals deemed met at target or higher per Committee; accelerated only upon qualifying termination within 2 years (double trigger). If not assumed: RSAs/RSUs vest; PSUs deemed earned at projected actual levels per Committee |
| TIP (Transition Income Plan) | If terminated due to restructuring/RIF/elimination: lump sum up to 26 weeks of base salary; company-paid COBRA medical/dental/vision for up to 26 weeks; cannot combine with CoC severance |
| Scenario modeling (as of Dec 31, 2024) | For CFO under CoC + qualifying termination: cash severance $1,819,000; pro rata bonus $374,500; PSUs $992,206; RSAs $2,720,786; additional retirement benefits $245,210; continued health care $14,708; outplacement $40,000; total $6,206,410 |
Retirement eligibility and vesting features:
- As of Dec 31, 2024, Ms. Gropp is the only NEO meeting age 55 + 10 years service threshold; special retirement terms allow prorated vesting of PSUs (if termination on/after first anniversary of grant) and pro rata vesting of certain RSAs subject to notice/discretion .
Clawback:
- NYSE-compliant compensation recovery policy covering erroneously awarded incentive-based compensation for the 3 prior fiscal years in a restatement .
Section 16 and related party:
- One late Form 4 filing (including one transaction relating to spouse-held shares) filed Sept 17, 2024 .
- Related party transaction: spouse (Thomas Gropp) employed as Director in Global Supply Chain Management; total compensation >$120,000; reviewed/approved under policy; CFO recused .
Compensation Structure
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Stock awards ($) | 199,273 | 993,558 | 1,322,612 |
| Non-equity incentive ($) | 189,832 | 325,500 | 614,180 |
| All other comp ($) | 306,573 | 411,767 | 224,195 |
| Total ($) | 1,032,711 | 2,324,573 | 2,687,237 |
Design features and governance:
- Strong pay-for-performance emphasis; incentives tied to EVA, Adjusted Free Cash Flow, and TSR; double-trigger CoC; one-year minimum vesting; robust stock ownership, anti-hedging/pledging; independent committee and consultant .
- 2024 say-on-pay approval ~93%; frequency annual, next in 2026 .
Investment Implications
- Alignment: CFO’s incentives are tightly linked to value-creation metrics (EVA, adjusted FCF, rTSR) with significant at-risk pay and double-trigger CoC; she is compliant with stringent ownership guidelines (3× salary), with no pledging/hedging permitted—reducing misalignment risk .
- Retention/overhang: Retirement eligibility introduces potential early vesting effects (pro rata on PSUs, RSAs) in certain termination scenarios; upcoming vesting dates (Feb 28, 2025/2026/2027; Aug 29, 2025/2026) could create periodic sell/withhold flows but are standard and largely mitigated by withholding and ownership holding requirements until guidelines are met .
- CoC economics: Modeled CFO CoC package totals ~$6.2M with 2× cash severance and full vesting mechanics under double-trigger; no excise tax gross-up (cutback in place), limiting shareholder-unfriendly features while preserving deal execution focus .
- Governance signals: Clean clawback policy, anti-hedging/pledging, strong say-on-pay support, and transparent related party oversight (spouse employment review) are positives; the single late Form 4 (spouse-related) is a minor administrative footnote, not a systemic red flag .