John M. Hofstetter
About John M. Hofstetter
John M. Hofstetter is Executive Vice President – U.S. Operations and a Named Executive Officer (NEO) of Preformed Line Products Company (PLPC). He beneficially owns 14,354 PLPC shares (<1% of outstanding), including 532 deferred common shares and 1,110 shares represented in the Company’s 401(k stock fund; unvested RSUs are excluded from beneficial ownership reporting . He is subject to stock ownership guidelines (3× salary) and, like other current executive officers, is in compliance; the Company prohibits short sales and hedging transactions, and has a NASDAQ-compliant clawback policy adopted in August 2023 . Company performance context during his NEO tenure: net income was $37.1M with ROE 12.3% in 2024 and $63.3M with ROE 20.8% in 2023; TSR (value of $100 initial investment) was $222.39 in 2024 and $231.46 in 2023 .
Past Roles
Not disclosed in company filings.
External Roles
Not disclosed in company filings.
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $380,004 | $410,004 |
| Target Bonus ($) | $190,002 (Grants table) | $205,002 (Grants table) |
| Maximum Bonus (% of Salary) | 85% of salary | 85% of salary |
| Actual Bonus Paid ($) | $323,003 (85% of salary) | $348,503 (85% of salary) |
Notes:
- Annual cash incentive is a sliding scale tied to return on shareholders’ equity (ROE), with target at 7% and scale from 3% to 11% .
Performance Compensation
Annual Cash Incentive (ROE-based)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Return on Shareholders’ Equity (ROE) | Not disclosed | Target payout at 7% ROE; scale 3%–11% | 20.8% ROE (2023), 12.3% ROE (2024) | 85% of salary for Hofstetter in 2023 and 2024 | Cash (annual) |
Long-Term Equity Incentives (RSUs)
2024 Grant (performance period ending Dec 31, 2026):
- Structure: Two components—performance-based RSUs (2/3 of award) and time-based RSUs (1/3), with three-year cliff vesting for time-based .
- Performance metrics: Three-year average YoY growth in pre-tax income and sales; thresholds set at -7%/0% (pre-tax income) and 0%/2% (sales); target -3% and 1%; maximum 0% and 2% .
- Payout calibration: Threshold 25% of maximum RSUs; target 50%; maximum 100% for other officers; dividends on unvested RSUs accrue and are payable upon vesting .
| Metric | Weighting | Threshold | Target | Maximum | Hofstetter Target RSUs | Hofstetter Time-based RSUs | Grant Date Fair Value |
|---|---|---|---|---|---|---|---|
| Pre-tax income growth (3-yr avg) | Not disclosed | -7% | -3% | 0% | 1,088 perf RSUs | 1,088 time-based RSUs | $403,953 |
| Sales growth (3-yr avg) | Not disclosed | 0% | 1% | 2% | 1,088 perf RSUs | 1,088 time-based RSUs | $403,953 |
Recent actuals for earlier cycles (reflecting pay-for-performance):
- 2021 cycle (ending Dec 31, 2024): pre-tax income growth 31.1%, sales growth 11.1%; vested at maximum .
- 2020–2022 cycle (ending Dec 31, 2022): pre-tax income growth 24.4%, sales growth 18.3%; vested at maximum .
| Cycle | Pre-tax Income Growth | Sales Growth | Payout | Hofstetter Shares Vested |
|---|---|---|---|---|
| 2021–2024 | 31.1% | 11.1% | Maximum | Included in outstanding schedule; vest confirmed Feb 2025 |
| 2020–2022 | 24.4% | 18.3% | Maximum | 3,847 perf RSUs in 2023 vesting table |
Vesting events in 2024:
- Performance RSUs (2021 grant, period ending 2023): Hofstetter 2,891 shares vested in Feb 2024 at $133.86 .
- Time-based RSUs (2022 grant): Hofstetter 1,911 shares vested Dec 31, 2024 at $127.79 .
Equity Ownership & Alignment
| Item | Amount | Notes |
|---|---|---|
| Beneficial Ownership (shares) | 14,354 (<1% of class) | Includes 532 deferred shares and 1,110 401(k) stock fund units; excludes unvested RSUs |
| Unvested RSUs (total) | 11,472 | Market/payout value $1,466,007 at $127.79 close (Dec 31, 2024) |
| Outstanding 2024 Grants | 2,176 perf RSUs; 1,088 time RSUs | Perf vest after 3-year performance; time-based cliff on Dec 31, 2026 |
| Outstanding 2023 Grants | 2,923 perf RSUs; 1,462 time RSUs | Perf vest after performance; time-based cliff on Dec 31, 2025 |
| Options | None outstanding | Company notes no option awards outstanding for NEOs |
| Ownership Guidelines | 3× salary for officers; Hofstetter compliant | Includes stock, eligible retirement holdings, and unvested time-based RSUs |
| Hedging/Pledging | Hedging and short sales prohibited; pledging not disclosed | Insider trading policy includes blackout windows and preclearance |
Insider transactions relevant to selling pressure:
- Company repurchased 4,500 shares from Hofstetter at $155.71 (30-day average) on June 14, 2023 .
Employment Terms
| Term | Hofstetter / Company Policy |
|---|---|
| Employment agreement | At-will; no individual employment, severance, or change-in-control agreements for NEOs |
| Change-in-control (CIC) treatment (equity) | Time-based RSUs fully vest to maximum; performance RSUs vest and pay at end of performance period based on achievement; options (if any) become fully exercisable |
| CIC value (Dec 31, 2024) | $1,466,007 for Hofstetter’s stock awards (assumes maximum) |
| Clawback policy | Recoup incentive compensation for 3 years preceding a required accounting restatement per NASDAQ rules (adopted Aug 2023) |
| Bonus plan mechanics | Annual cash incentive tied to ROE (3%–11% scale; target 7%); Hofstetter max bonus = 85% of salary |
| Tax gross-ups | Tax gross-up on SERP contributions (e.g., $3,617 in 2024) |
Compensation Structure Analysis
- Mix and risk: Hofstetter’s annual bonus is fully performance-based on ROE; long-term equity is majority performance RSUs (two-thirds) with the remainder time-based for retention .
- Target changes (ease vs difficulty): For 2024 grants, performance thresholds were set lower (pre-tax income up to 0% and sales up to 2%) reflecting anticipated demand decline after strong 2023—making targets easier relative to prior cycles (e.g., 2023 targets of 6%/9% and 2022 targets of 7%/7%) .
- Say-on-pay: Strong shareholder support—over 97% approval in 2023; frequency set to every three years .
Say-on-Pay & Shareholder Feedback
- 2023 say-on-pay result: >97% support .
- Frequency: Shareholders approved say-on-pay every three years .
Compensation Peer Group (Benchmarking)
- 2024: Willis Towers Watson survey—manufacturing peers with revenue $500M–$1B; officers’ total compensation aligned near median depending on payout .
- 2023: Willis Towers Watson survey—manufacturing companies with 1,000–4,999 employees; base salaries near median .
- 2022: Willis Towers Watson survey—manufacturers of durable goods with 1,000–4,999 employees; base salaries near median .
Performance & Track Record (Company Context)
| Year | TSR (Value of $100) | Net Income ($000) | ROE |
|---|---|---|---|
| 2024 | $222.39 | $37,111 | 12.3% |
| 2023 | $231.46 | $63,332 | 20.8% |
| 2022 | $143.07 | $54,395 | 21.0% |
Investment Implications
- Pay-for-performance linkage is strong: annual ROE-driven bonus and majority performance RSUs align compensation with profitability and growth; Hofstetter’s actual bonus paid at 85% of salary in 2023–2024 reflects high ROE delivery .
- Retention vs flexibility: No employment or severance agreement reduces guaranteed protections, but sizable unvested RSUs (11,472; ~$1.47M) and ownership guidelines enhance retention and alignment .
- Potential selling pressure: 4,802 shares vested for Hofstetter in 2024 and a 4,500-share repurchase transaction in 2023 indicates supply from insider equity settlements/repurchases; monitor post-vesting activity and blackout windows .
- Governance safeguards: Prohibitions on hedging/short sales, a NASDAQ-aligned clawback, and strong say-on-pay support (>97%) reduce misalignment risk; however, 2024 LTIP performance thresholds were set easier due to anticipated market headwinds—watch execution against these targets for true pay-for-performance integrity .
Data sources: PLPC DEF 14A (2025, 2024, 2023) and 8-K filings as cited above.