Thomas A. Dineen
STURM RUGER & COAbout Thomas A. Dineen
Senior Vice President, Treasurer and Chief Financial Officer of Sturm, Ruger & Company, Inc. (RGR). Based on the Company’s updated severance agreement that amended his prior agreement dated May 13, 2008, Dineen has been an executive at least since 2008, indicating long-tenured finance leadership at Ruger . Company performance under the executive team’s oversight: in 2024 EPS was $1.77, EBITDA $55.1M, cash from operations $55.5M, with $159.3M of new product sales (32% of firearm sales), $46.2M returned to shareholders, and year-end cash/short-term investments of $105.5M with no debt . Pay-versus-performance showed Company TSR value of $100.76 for an initial fixed $100 investment in 2024 and net income of $30.6M; in 2023 TSR was $127.41 with net income $48.2M .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $441,667 | $459,375 | $475,000 (effective Aug 16, 2023) |
| Profit Sharing ($) | $67,864 | $33,757 | $22,673 |
| Performance-Based Cash Bonus – Target ($) | $318,800 | $337,500 | $356,300 |
| Performance-Based Cash Bonus – Actual Paid ($) | $303,094 | $240,138 | $213,038 |
| 401(k) Company Contributions ($) | $27,450 | $29,700 | $31,050 |
| Group Term Life Premium Taxable ($) | $2,622 | $4,902 | $4,902 |
Performance Compensation
Annual cash bonus structure and outcomes:
| Metric | 2023 | 2024 |
|---|---|---|
| EBIT Target ($MM) | $91.1 | $72.4 |
| EBIT Actual ($MM) | $58.8 | $39.7 |
| EBIT Weighting (%) | 80% | 80% |
| Non-Financial Objectives Weighting (%) | 20% | 20% |
| Non-Financial Objectives Achievement (%) | 90% | 80% |
| Aggregate Payout vs Target (%) | 69.7% | 59.8% |
| Cash Bonus Paid ($) | $240,138 | $213,038 |
Equity award performance framework (applies to PSUs granted to executives):
- Performance metric: Return on Net Operating Assets (RONA) measured over three one-year periods; payout from 0–200% based on achievement (≥150% caps at 200%); TSR modifier ±10 percentage points over 3-year period .
- 2024 awards to date: 3% achievement; 2023 awards to date: 9%; 2022 awards to date: 26% .
Equity Awards (grants and vesting terms)
Performance-based RSUs (PSUs):
| Detail | 2023 | 2024 |
|---|---|---|
| Grant Date | Jun 8, 2023 | Feb 29, 2024 |
| RSUs Awarded (#) | 8,485 | 10,984 |
| Grant Date Fair Value ($) | $450,000 | $475,000 |
| Vesting Terms | 3-year performance (RONA) + TSR modifier | 3-year performance (RONA) + TSR modifier |
| Achievement to Date | 9% | 3% |
Time-based RSUs (Retention RSUs):
| Detail | 2023 | 2024 |
|---|---|---|
| Grant Date | Jun 8, 2023 | Feb 29, 2024 |
| RSUs Awarded (#) | 8,485 | 10,984 |
| Grant Date Fair Value ($) | $450,000 | $475,000 |
| Vesting Terms | Cliff vest 100% at 3 years; cash-settled since 2020 | Cliff vest 100% at 3 years; cash-settled since 2020 |
Outstanding unvested RSUs as of 12/31/2024 (by grant year):
| Grant Year | Unvested RSUs (#) | Source |
|---|---|---|
| 2022 | 5,974 (Retention) | |
| 2022 | 5,974 (Performance) | |
| 2023 | 8,485 (Retention) | |
| 2023 | 8,485 (Performance) | |
| 2024 | 10,984 (Retention) | |
| 2024 | 10,984 (Performance) |
Key grant mechanics:
- Equity grants priced at mean of high/low on grant date (e.g., $43.25 for 2/29/24 grants) .
- Company uses RSUs (no stock options); re-pricing prohibited; grants typically 4th business day after 10-K/10-Q filing .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficially Owned Shares (as of 4/3/2025) | 90,494 shares |
| Options (Exercisable/Unexercisable) | None outstanding |
| Ownership % of Outstanding | ~0.55% (computed from 90,494 / 16,554,962 shares outstanding) |
| Shares Vested/Converted in 2024 | 8,541; value realized $368,400 |
| Shares Vested/Converted in 2023 | 14,481; value realized $842,700 |
| Stock Ownership Guidelines | CEO 5x salary; SVP 3x salary; other NEOs 2x salary (Company-wide policy) |
| Hedging/Pledging | Hedging and speculative transactions prohibited under Insider Trading Policy; policy posted and enforced |
Employment Terms
| Provision | Terms |
|---|---|
| Severance (pre-Change in Control) | Lump sum equal to 18 months of Base Annual Salary; prorated vesting of outstanding Retention and Performance RSUs; continued medical benefits up to 18 months |
| Severance (within 24 months post-Change in Control) | Lump sum equal to 24 months of Annual Compensation (Base Salary + 100% target cash bonus); full vesting and cash payment of RSUs equal to value as of Change in Control; continued medical benefits up to 24 months |
| Agreement Term & Renewal | One-year term with automatic one-year extensions unless Company gives 360-day notice or executive gives notice/terminates |
| Restrictive Covenants | Confidentiality; Non-competition during severance period; Non-solicitation/non-interference during severance period; Release requirements; Colorado-specific limitations disclosed |
| Change-in-Control (Plan definitions) | CIC deemed at ≥30% ownership under 2023 SIP (25% under 2017 SIP), majority board turnover, major asset sale, merger/consolidation not meeting continuity thresholds, liquidation/dissolution |
| Equity Plan CIC Treatment | 2023 Plan: double-trigger accelerated vesting (requires CIC + qualifying termination); 2017 Plan: accelerated vesting unless awards are assumed/substituted; Committee discretion applies |
Performance & Track Record
- 2024 operating highlights: EPS $1.77; EBITDA $55.1M; cash from operations $55.5M; $159.3M new product sales (32% of firearm sales); $11.8M dividends and $34.4M buybacks; year-end cash/short-term investments $105.5M; no debt .
- 2023 operating highlights: EPS $2.71; EBITDA $75.9M; cash from operations $33.9M; $121.7M new product sales (23% of firearm sales); special dividend and repurchases totaling $122.6M; year-end cash/short-term investments $117.7M; no debt .
- Pay vs performance (TSR & income): 2024 TSR value $100.76 and net income $30.6M; 2023 TSR value $127.41 and net income $48.2M, contextualizing compensation outcomes vs shareholder returns .
Compensation Governance & Shareholder Feedback
- Compensation Committee (independent): John A. Cosentino, Jr. (Chair), Sandra S. Froman, Terrence G. O’Connor, Ronald C. Whitaker, Phillip C. Widman .
- Say-on-pay: 97% approval at 2024 Annual Meeting (strong support for pay-for-performance program) .
- Clawback policy: Performance-based compensation subject to clawback on restated financials (policy posted) .
Investment Implications
- Pay-for-performance alignment: Dineen’s cash bonus and PSU vesting are directly tied to EBIT, RONA, and 3-year TSR; aggregate payout fell to 59.8% in 2024 vs 69.7% in 2023, consistent with lower EBIT and TSR, reducing near-term cash compensation and PSU realizations .
- Retention and insider-selling pressure: Three-year cliff vest RSUs and performance-based PSU schedules create periodic vesting events (e.g., 8,541 shares vested in 2024) that may contribute to selling pressure around vest dates; however, the program’s cash settlement for retention RSUs since 2020 partially mitigates share issuance and selling dynamics .
- Change-in-control economics and retention risk: Severance protections (18 months base pre-CIC; 24 months annual comp post-CIC with full RSU vest) and non-compete/non-solicit covenants lower retention risk through corporate transitions; double-trigger equity vesting aligns with market norms and reduces windfall risk absent termination .
- Alignment safeguards: Hedging bans and re-pricing prohibitions, plus ownership guidelines (SVP 3x salary policy), strengthen alignment; option use is currently zero, focusing incentives on RSUs linked to multi-year performance .