Matt Tonn
FreightCar AmericaAbout Matt Tonn
W. Matthew (“Matt”) Tonn, 59, is Chief Commercial Officer of FreightCar America (RAIL), serving since September 2019, with 30+ years of commercial and operations experience in the railroad industry; prior roles include senior commercial leadership at WABTEC and earlier sales/marketing roles at Standard Car Truck, National Castings/ABC NACO, and ZefTek (VP Sales & Marketing / Equity Partner) . Company performance under the compensation “Pay vs. Performance” disclosure shows 2024 Total Shareholder Return (value of initial $100) of $243 and Net Income of ($75,817,000), contextualizing incentive outcomes and equity alignment for the NEO group . The annual incentive program for 2024 paid out at 139.7% of target based on adjusted EBITDA, sales, operating cash flow, and safety metrics, indicating strong cash flow/EBITDA performance despite negative GAAP net income .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| WABTEC – Train Control, Signaling & Analytics | Vice President, Sales & Marketing | May 2017–Sep 2019 | Led commercial activities in advanced train control/signaling & analytics |
| WABTEC (Regional) | Regional VP, Sales & Marketing | Oct 2008–May 2017 | Regional growth and commercial coverage across rail sector |
| Standard Car Truck Co.; National Castings/ABC NACO | Various sales & marketing positions | Not disclosed | Not disclosed |
| ZefTek, Inc. | VP Sales & Marketing; Equity Partner | Not disclosed | Not disclosed |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $375,000 | $400,000 (7% increase) |
| Target Bonus % of Base | 50% (offer letter) | 50% (offer letter) |
| Threshold / Max Bonus % | 20% / 100% (offer letter) | 20% / 100% (offer letter) |
| All Other Compensation ($) | $16,812 | $16,200 |
| Total Compensation ($) | $826,690 | $1,029,275 |
Offer letter terms (dated June 9, 2019) set initial base at $310,000; threshold/target/max bonus 20%/50%/100%; sign-on 40,000 restricted shares and $50,000 cash .
Performance Compensation
Annual Cash Incentive – 2024 Structure and Outcomes
| Metric | Weighting | Achievement vs Target | Payout Impact |
|---|---|---|---|
| Adjusted EBITDA | 31.7% | 190% of target | Positive contribution to payout |
| Sales Goals | 31.7% | 20% of target | Minimal contribution |
| Operating Cash Flow | 31.7% | 200% of target | Strong positive contribution |
| Safety Goals | 5% | 200% of target | Positive contribution |
| Total Payout | — | — | 139.7% of target |
Annual Cash Incentive – Paid
| Metric | 2023 | 2024 |
|---|---|---|
| Non-Equity Incentive Plan Compensation ($) | $184,250 | $275,596 |
Long-Term Incentive Awards (Equity) – 2024 Grants
| Award Type | Grant Timing | Number of Shares/Options | Vesting Terms |
|---|---|---|---|
| Options | January 2024 | 86,940 | Vest in 3 equal installments beginning Jan 4, 2025 |
| Restricted Shares (time-based) | January 2024 | 61,814 | Cliff vest on the 3rd anniversary (Jan 4, 2027) |
Outstanding Equity & Vesting Schedule (Selected Awards at FY2024)
| Instrument | Quantity | Strike | Expiration | Vesting Milestones |
|---|---|---|---|---|
| RSU (time-based) | 32,886 | — | — | Vested on Jan 17, 2025 |
| RSU (time-based) | 39,014 | — | — | Vest Jan 6, 2026 |
| RSU (time-based) | 61,814 | — | — | Vest Jan 4, 2027 |
| Options (exercisable) | 144,090 | $1.66 | Jan 24, 2030 | As granted; typical 3-year ratable schedule applies per plan footnote series |
| Options (exercisable) | 300,000 | $2.38 | Jan 5, 2031 | As granted |
| Options (exercisable) | 49,162 | $3.81 | Jan 28, 2031 | As granted |
| Options (exercisable/unexercisable) | 32,058 / 15,791 | $3.82 | Jan 17, 2032 | Vests in 3 equal annual installments beginning Jan 17, 2023 |
| Options (exercisable/unexercisable) | 19,008 / 36,900 | $3.22 | Jan 6, 2033 | Vests in 3 equal annual installments beginning Jan 6, 2024 |
| Options (unexercisable) | 86,940 | $2.73 | Jan 4, 2034 | Vests in 3 equal annual installments beginning Jan 4, 2025 |
Market value reference for RSUs uses $8.96 closing price on Dec 31, 2024 . Options with strikes below $8.96 were in-the-money at year-end price (e.g., $1.66–$4.30) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership (shares) | 859,597; approx. <1% of class |
| Unvested RSUs – market value | 32,886 ($294,659); 39,014 ($349,565); 61,814 ($553,853) at $8.96/share |
| Options – exercisable (examples) | 144,090 @ $1.66 (exp. 1/24/2030); 300,000 @ $2.38 (exp. 1/5/2031); 49,162 @ $3.81 (exp. 1/28/2031) |
| Options – unexercisable (examples) | 15,791 @ $3.82 (exp. 1/17/2032); 36,900 @ $3.22 (exp. 1/6/2033); 86,940 @ $2.73 (exp. 1/4/2034) |
| Stock Ownership Guidelines | Officers must hold at least the aggregate number of awards granted over the trailing 3 years; as of Dec 31, 2024, NEOs either exceeded or were in the transition period to comply |
| Hedging/Pledging | Insider Trading Policy prohibits pledging, hedging, holding in margin accounts, short sales and certain options trading without General Counsel consent; preclearance required |
Employment Terms
| Provision | Terms |
|---|---|
| Appointment & Offer Letter | Appointed CCO effective Sep 30, 2019; offer letter dated Jun 9, 2019; no specified term |
| Base & Bonus | Base initially $310,000; bonus thresholds 20% (threshold), 50% (target), 100% (max) of base |
| Sign-on Incentives | 40,000 restricted shares; $50,000 cash sign-on |
| Non-Compete / Non-Solicit | Non-compete and non-solicit of customers: 1 year post-termination; non-solicit of employees: 2 years post-termination; confidentiality/IP assignment |
| Executive Severance Plan (baseline) | Upon involuntary termination without Cause or resignation for Good Reason: 12 months base salary continuation; a lump sum equal to average bonus for last two full years (paid Mar 15 following termination); 12 months subsidized health coverage; transition services up to 12 months if requested |
| Change-in-Control – Additional Severance (double-trigger within 24 months) | Additional 12 months base salary; additional payment equal to average bonus for last two full years; additional 6 months health insurance continuation (aggregate increases vs baseline) |
| Change-in-Control – Single-Trigger Transaction Payment & Equity | If a Change in Control occurs while employed: equity vesting accelerates; transaction payment equal to 75% of annual base salary (e.g., $300,000 based on $400,000 2024 base) |
| Clawbacks | 2023 Clawback Policy under Exchange Act Section 10D and Nasdaq; recovery of erroneously awarded comp upon required restatement; incentive equity subject to forfeiture/clawback for restrictive covenant breaches |
| Tax Gross-Ups | No change-in-control tax gross-ups provided |
| Retirement/Deferred Comp | Company 401(k) match up to 4%; defined benefit pension plan frozen; no NEO participation; no non-qualified deferred compensation plan |
Investment Implications
- Pay-for-performance alignment: 2024 AIP paid 139.7% of target driven by adjusted EBITDA and operating cash flow outperformance, while sales underdelivered (20% of target), suggesting management emphasis on cash generation and operational efficiency; this supports variable cash comp responsiveness to operating metrics despite negative GAAP net income .
- Equity alignment and potential supply: Significant in-the-money options (strikes $1.66–$4.30 vs $8.96 year-end price) and scheduled RSU vestings (Jan 6, 2026; Jan 4, 2027) can create periodic liquidity events; trading is constrained by anti-hedging/pledging policies and preclearance, but upcoming vest dates may still introduce episodic selling pressure typical for executives .
- Retention and change-in-control economics: Baseline severance of 1x salary + average bonus + 12 months health, combined with additional 1x salary + average bonus + 6 months health in a double-trigger CoC, plus single-trigger transaction payment (75% of base) and equity acceleration, provide robust protection; this reduces near-term departure risk but introduces potential overhang in strategic transaction scenarios due to accelerated vesting .
- Governance and risk: No tax gross-ups, formal clawback policy, and strict insider trading/pledging prohibitions are shareholder-friendly; ownership guidelines require meaningful skin-in-the-game (aggregate grants over 3 years), with NEOs compliant or in transition as of year-end 2024 .
- Compensation mix trends: 2024 LTIP split ~50/50 between time-based RSUs and options, maintaining leverage to long-term stock appreciation while providing retention via time-based vesting; a 7% base salary increase in 2024 reflects merit-driven adjustment rather than guaranteed pay inflation .