N. Nelson Fleming, IV
About N. Nelson Fleming, IV
N. Nelson Fleming, IV serves as Vice President of Strategy and Business Development at Construction Partners (ROAD); he is the son of Executive Chairman Ned N. Fleming, III, and received total compensation of approximately $791,160 in fiscal 2024, comprised of ~$460,000 cash, ~$42,630 benefits, and ~$288,530 equity awards including a performance share award with a 3,656-share target . He previously served as Vice President of Business Development and Director of Acquisition and Strategy Development, receiving restricted stock in 2018 that fully vested, indicating long-term equity alignment . Company performance metrics driving executive incentives currently prioritize compound aggregate revenue growth and adjusted EBITDA margin over the FY2024–FY2026 period with a TSR modifier versus the Russell 2000, reflecting emphasis on profitable growth and shareholder returns . In 2024, company results used for PSU vesting from a prior cycle included compound aggregate revenue growth of 26.1% vs. 18.0% target and TSR at the 92nd percentile versus the Russell 2000, supporting above-target vesting for eligible participants .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Construction Partners, Inc. | Director of Acquisition and Strategy Development | FY2017–FY2018 | Received and fully vested 35,280 restricted shares (granted Feb 23, 2018), signaling retention and M&A/strategy engagement . |
| Construction Partners, Inc. | Vice President of Business Development | FY2021 | Role elevated to VP; substantial 2021 equity grant ($722k FV), indicating focus on growth initiatives . |
| Construction Partners, Inc. | Vice President of Strategy and Business Development | FY2023–FY2024 | Continued strategic role; 2024 compensation included PSUs (target 3,656) under performance plan . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Tar Frog Investment Management, LLC | Co-manager | As of Record Date FY2024 | Shares co-manager power to vote/direct 134,582 Class B shares; part of a voting agreement with SunTx Capital II Management . |
Fixed Compensation
Multi-year cash and benefits (proxy-disclosed) for Nelson Fleming:
| Metric ($) | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|
| Cash Compensation | 218,000 | 334,000 | 345,000 | 460,000 |
| Benefits | — | 35,000 | 41,000 | 42,630 |
| Equity Awards (Grant-Date FV) | 722,000 | 252,000 | 187,000 | 288,530 |
| Total Compensation | 940,000 | 621,000 | 573,000 | 791,160 |
Notes:
- Proxy disclosures do not break out base salary vs. bonus for Nelson; only aggregate cash compensation is provided .
Performance Compensation
Structure of Nelson’s FY2024 performance share grant (PSUs) and company-wide PSU framework:
| Component | Metric | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| FY2024 PSU Grant (Target 3,656 shares) | Compound aggregate revenue growth rate | 50% | Target set by plan; vesting threshold at 89% of target | In-progress (performance period FY2024–FY2026) ; payout range 75–150% of metric tranche | 3-year performance period: Oct 1, 2023 – Sep 30, 2026; TSR modifier ±15% vs Russell 2000, with positive TSR required for upward adjustment . |
| FY2024 PSU Grant (Target 3,656 shares) | Average Adjusted EBITDA margin | 50% | Target set by plan; vesting threshold at 95.2% of target | In-progress; payout range 75–150% of metric tranche | As above . |
Reference outcome from the prior PSU cycle for context:
- FY2022–FY2024 PSU metrics achieved 26.1% compound aggregate revenue growth (150% payout) and 11.0% ROCE (no payout), with TSR at the 92nd percentile (+15% modifier), supporting elevated vesting for eligible participants .
Equity Ownership & Alignment
Ownership and control linkages as of FY2024 Record Date:
| Holding Type | Class A Shares | Class B Shares | % of Class A Outstanding | % of Class B Outstanding |
|---|---|---|---|---|
| Direct (N. Nelson Fleming, IV) | 40,201 | 88,735 | 0.085% (40,201 / 47,183,599) | 1.012% (88,735 / 8,765,803) |
| Ned N. Fleming, IV 2013 Trust (beneficial) | — | 241,008 | — | 2.751% (241,008 / 8,765,803) |
| Tar Frog Investment Management, LLC (co-manager; shared power) | — | 134,582 | — | 1.535% (134,582 / 8,765,803) |
| Aggregate exposure where he holds or shares voting/disposition power | 40,201 | 464,325 | 0.085% | 5.294% |
Additional alignment and governance features:
- Voting agreement: SunTx Capital II Management has shared voting power over shares held directly by Nelson, the Ned N. Fleming, IV 2013 Trust, and Tar Frog, aligning his votes with SunTx recommendations .
- Dual-class and exchanges: On May 22, 2024, he exchanged 1,545 Class A shares for 1,545 Class B, increasing voting power (10 votes/share vs. 1 for Class A) without changing total outstanding; this signals preference for voting control alignment .
- Hedging/pledging: Company policy prohibits short sales and derivatives; no hedging or pledging disclosed for Nelson (prepaid forward noted for NNFIII only), reducing misalignment risk .
Employment Terms
- Indemnification: The Company has indemnification agreements with each current executive officer, including advancement of expenses and a presumption of entitlement, subject to applicable law .
- Employment agreements: ROAD maintains employment agreements with certain key executives (explicitly including NEOs), covering salary, annual bonus eligibility, equity awards, perquisites, restrictive covenants, and termination payments; the agreements for officers feature 18-month non-compete/non-solicit and a company right of first refusal to purchase Class B shares for 18 months post-termination .
- Severance economics (officer template): Termination without cause or for good reason provides severance equal to 1.5x the average combined base salary and cash bonus over the prior two fiscal years, payable over 18 months, plus COBRA reimbursements (18 months) and up to $10,000 outplacement; subject to restrictive covenant compliance and 280G cutback as needed .
- Clawback: Compensation subject to company clawback policies per law and listing requirements .
- Change in control (equity): The Compensation Committee may accelerate vesting of equity awards at any time, including upon a change in control, at its discretion .
Note: The proxy explicitly confirms indemnification for all executive officers; employment agreements are detailed for NEOs and officers generally, but the Company does not specifically disclose Nelson’s individual agreement, so terms above reflect the standard officer template rather than a bespoke contract .
Related Party and Governance Context
- SunTx management services: ROAD paid SunTx Capital Management ~$2.0 million in FY2024 for strategic advisory services; the agreement runs through October 1, 2028, illustrating ongoing sponsor involvement .
- Island Pond access agreement: ROAD paid Island Pond Corporate Services, LLC $400,000 in FY2024 for business-development access to land owned by affiliates of Ned N. Fleming, III .
- Control dynamics: As of the Record Date, Class B represented 65.0% of total voting power, and the SunTx Group beneficially owned 51.2% of total voting power, enabling effective control of board composition and stockholder proposals .
Compensation Structure Analysis
- Increasing at-risk equity: Nelson’s 2024 equity award fair value rose to ~$288,530 (including PSUs) from ~$187,000 in 2023, increasing equity-linked exposure to performance outcomes .
- Performance linkage: His 2024 PSU award references company metrics (revenue growth and adjusted EBITDA margin) with a TSR-based modifier, reinforcing alignment with profitable growth and relative shareholder returns .
- Discretionary elements: While his cash compensation is aggregated, the Company’s broader executive program includes discretionary cash and stock bonuses tied to acquisitions and performance, indicating variable pay tied to strategic events (e.g., Lone Star acquisition for NEOs) .
Equity Ownership & Alignment Details
- Stock ownership and voting alignment with SunTx suggest strong control-linked incentives; his exchange into Class B shares further indicates alignment with high-vote stock and sponsor governance .
- No disclosed pledging or hedging by Nelson; Company policy restricts such activities, reducing misalignment risk .
Risk Indicators & Red Flags
- Related-party payments (SunTx services; Island Pond land access) present governance sensitivities; such transactions are disclosed and ongoing .
- Dual-class structure and voting agreement concentrate control; while it stabilizes strategy execution, it may reduce minority shareholder influence .
- Equity award supply: PSU vesting around FY2026 and potential time-based RSU grants to broader management could create episodic insider selling pressure upon vesting; specific vesting schedules for Nelson beyond his PSU target are not disclosed .
Investment Implications
- Alignment: Nelson’s compensation mix includes performance shares tied to revenue growth and adjusted EBITDA margin with a TSR modifier, supporting pay-for-performance alignment; his Class B accumulation and voting agreement closely align him with SunTx’s control strategy .
- Retention: Officer-level templates include 18-month non-compete and structured severance, plus a right of first refusal on Class B sales post-termination, reducing abrupt exits and near-term selling pressure; his increasing equity participation suggests retention incentives .
- Governance sensitivity: Ongoing related-party service fees and land access payments underscore sponsor involvement; monitor future disclosures for changes in the magnitude of related-party transactions and any personal pledging or derivative use by insiders .
- Performance execution: The company’s prior-cycle PSU outcomes (above-target revenue growth and top-decile TSR vs. Russell 2000) underpin confidence in incentive design; continued delivery on revenue growth and margin targets is critical for Nelson’s PSU vesting in the FY2024–FY2026 cycle .