Andrew S. Klaus
About Andrew S. Klaus
Andrew S. Klaus, age 59, has served as Chief Financial Officer (Principal Financial and Accounting Officer) of Preformed Line Products Company since April 2020. Prior roles include Chief Accounting Officer & VP Corporate Controller at Vertiv Holdings Co (2017–2020), CFO at Consolidated Precision Products (2013–2017), and VP Corporate Controller at JMC Steel Group/Zekelman Industries (2007–2013), bringing deep finance and controls expertise across manufacturing and industrial businesses . Company performance used to determine his pay includes annual Return on Shareholders’ Equity for bonuses (12.3% in 2024; 20.8% in 2023) and multi-year pre-tax income and sales growth for RSUs; total shareholder return and net income are tracked in the pay-versus-performance disclosure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Vertiv Holdings Co | Chief Accounting Officer & VP, Corporate Controller | 2017–2020 | Led corporate reporting and controls for a global industrial technology company . |
| Consolidated Precision Products | Chief Financial Officer | 2013–2017 | Oversaw finance for aerospace components manufacturer . |
| JMC Steel Group (Zekelman Industries) | VP, Corporate Controller | 2007–2013 | Managed corporate accounting for major steel tube manufacturer . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 400,008 | 400,008 | 460,008 |
| Non-Equity Incentive Paid ($) | 340,007 | 340,007 | 460,008 |
| “All Other Compensation” ($) | 11,734 | 99,603 | 135,712 |
| Total Compensation ($) | 1,139,371 | 1,839,220 | 1,509,061 |
- Annual bonus design: sliding scale on pre-tax income as % of average shareholders’ equity over 3–11% range, with implied target at 7% (half of maximum). Maximum bonus was 85% of salary for 2023 and increased to 100% for CFO in 2024; actual company ROE produced 100% payout for 2024 and 85% payout for 2023 .
- All Other Compensation breakdown for 2024 includes SERP contributions ($63,561), related tax gross-up ($3,941), profit-sharing ($43,500), group life premiums ($6,445), and dividends ($15,765 total) .
Performance Compensation
Annual Cash Incentive – Outcomes
| Year | Metric | Target | Actual | Payout |
|---|---|---|---|---|
| 2024 | Return on Shareholders’ Equity | 7% (midpoint) | 12.3% | 100% of salary for CFO ($460,008) |
| 2023 | Return on Shareholders’ Equity | 7% (midpoint) | 20.8% | 85% of salary for CFO ($340,007) |
Long-Term Incentives (RSUs) – Design and 2024/2023 Grants (Klaus)
| Grant Year | Grant Date | Time-Based RSUs (units) | Performance RSUs – Threshold/Target/Max (units) | 3-year Performance Metrics & Thresholds | Vesting |
|---|---|---|---|---|---|
| 2024 | 2/7/2024 | 1,221 | 611 / 1,221 / 2,442 | Three-year avg pre-tax income growth: -7%, -3%, 0%; sales growth: 0%, 1%, 2% | Time-based cliff vests after 3 years (12/31/2026); performance RSUs vest after 3-year period based on outcomes |
| 2023 | 2/8/2023 | 1,539 | 769 / 1,539 / 3,077 | Pre-tax income growth: 3%, 6%, 9%; sales growth: 6%, 9%, 12% | Time-based cliff vests after 3 years (12/31/2025); performance RSUs vest after 3-year period |
- 2024 grant-date fair value for Klaus: $453,333 .
- 2023 grants included an additional “other stock-based award” of 4,730 shares vesting upon grant (recognition for contributions over 2020–2022 when he did not participate), grant-date value $590,209 .
Recent Vesting/Realization
| Year | Shares Vested (Klaus) | Value Realized ($) | Notes |
|---|---|---|---|
| 2024 | 5,749 | 756,356 | 2021 performance RSUs vested at max (3,565 shares at $133.86) plus 2022 time-based RSUs (2,184 shares at $127.79) . |
| 2023 | 6,513 | 829,970 | 2020–2022 performance RSUs and 2020 time-based RSUs vested; includes special 2023 award vesting . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 23,037 shares; less than 1% of outstanding . |
| Deferred Shares (DSP) | 4,947 shares deferred in rabbi trust . |
| Unvested RSUs (subject to vesting) | 11,696 RSUs excluded from beneficial ownership count . |
| Outstanding Unearned RSUs (as of 12/31/2024) | 12,648 units; market/payout value $1,616,263 (at $127.79) . |
| Stock Ownership Guidelines | 3× annualized base salary for officers; types counted: direct stock, Company retirement plan stock, unvested time-based RSUs; all current execs have met requirements (exceptions apply only to two newer VPs) . |
| Hedging/Short Sales | Prohibited; blackout windows and pre-approval required for certain officers . |
| Pledging | No pledging policy disclosure noted; no pledging reported in the proxy . |
Recent Insider Transactions (Company-Approved Repurchases)
| Date | Shares | Price | Counterparty |
|---|---|---|---|
| 8/08/2023 | 2,151 | $171.98 (30-day avg) | Company repurchased shares from Andrew S. Klaus . |
Employment Terms
- At-will employment; no individual employment, severance, or change-in-control agreements for NEOs .
- Change-in-Control mechanics under LTIP/award agreements:
- Options (if any) become fully exercisable and vested on change in control .
- Time-based RSUs fully vest for the maximum shares on change in control .
- Performance RSUs vest, but payout equals earned shares at the end of the performance period based on achievement of original performance conditions (i.e., not automatically max) .
- Estimated stock award value for Klaus upon change in control as of 12/31/2024: $1,616,263 .
- Clawback policy adopted August 2023: mandatory recovery of incentive compensation paid in the three years prior to an accounting restatement (NASDAQ-aligned) .
- Tax gross-ups: limited to local taxes on SERP contributions (e.g., $3,941 for Klaus in 2024) .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($000s) | 54,395 | 63,332 | 37,111 |
| Return on Shareholders’ Equity (%) | 21.0% | 20.8% | 12.3% |
| Total Shareholder Return (Indexed $100) | $143.07 | $231.46 | $222.39 |
- Committee recognized Klaus with an additional 4,730-share award in 2023 for contributions to the 2020–2022 period (during which he did not participate in the LTIP due to timing), vesting immediately—an execution-confidence signal but a one-off .
Compensation Committee Analysis & Peer Benchmarking
- Philosophy: attract/retain key leaders; significant pay tied to company performance via annual ROE bonuses and multi-year RSUs on pre-tax income and sales growth .
- Peer benchmarking: Willis Towers Watson surveys; 2024 peer set based on manufacturing companies with revenue $500M–$1B; salaries generally between 25th–75th percentile; NEO salary increases approved for competitiveness . 2023 peer set based on employment levels (1,000–4,999); total compensation near median depending on payout realization .
- Say-on-pay: >97% approval at 2023 annual meeting; shareholders approved say-on-frequency every three years .
Risk Indicators & Red Flags
- Hedging/short sales prohibited; insider trading policy requires windows and approvals, mitigating misalignment risk .
- No executive severance/change-in-control cash multiples; equity acceleration terms apply, which may modestly increase sale-of-company incentives but retain performance gating for PSUs .
- Limited tax gross-ups (SERP-related local taxes), not broad golden-parachute gross-ups .
- Company-facilitated repurchases from insiders (including Klaus) in 2023 provide liquidity but reduce public selling pressure; these are formally approved related-party transactions .
Investment Implications
- Pay-for-performance alignment is strong: annual cash tied to ROE produced full payout in 2024 (12.3% ROE), and long-term RSUs hinge on multi-year pre-tax income and sales growth with prudent thresholds adjusted to anticipated 2024 demand headwinds—suggesting realism in targets and retention through three-year cliffs .
- Retention risk appears contained: sizable unearned RSU balances (Klaus $1.62M value) and ownership guidelines met, with DSP deferrals and recent vesting indicating continued alignment; absence of severance reduces departure optionality, while equity acceleration still motivates continuity to performance period-end .
- Insider selling pressure currently moderate: 2023 company-approved repurchase (2,151 shares) and substantial upcoming vest schedules could add future supply, but DSP deferrals and policy prohibitions on hedging/short sales mitigate adverse signals .
- Governance posture is conservative: NASDAQ-compliant clawback, ownership guidelines, and prohibited hedging; however, no explicit pledging prohibition is disclosed—monitor for any future pledging updates .
Overall, Klaus’ compensation structure and ownership posture link materially to ROE and multi-year operational growth, with retention levers (time-based RSUs, DSP) balanced against realistic performance gates; insider liquidity events have been controlled via Company repurchases rather than open-market selling.