Russell L. Gordon
RPM INTERNATIONAL INC/DE/About Russell L. Gordon
Russell L. Gordon, age 59, is Vice President and Chief Financial Officer of RPM International Inc., serving as CFO since 2012 after roles as Vice President – Corporate Planning (2007–2012) and Director of Corporate Development (1995–2007) . Prior to RPM, he held finance positions at Goodrich’s Specialty Chemicals Division and earlier worked as an industrial engineer at VLSI Technology Inc. . RPM delivered fiscal 2025 net sales of $7.37B (+0.5% YoY), net income of $688.7M (+17.0% YoY), and record diluted EPS of $5.35; Adjusted EBIT margin rose to 13.2% in FY2025 from 10.6% in FY2022 (+260 bps), and TSR since 2020 reached $167 on a $100 base .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| RPM International Inc. | Vice President & CFO | 2012–present | Principal Financial Officer; SOX certifications and ICFR oversight |
| RPM International Inc. | Vice President – Corporate Planning | 2007–2012 | Corporate planning leadership |
| RPM International Inc. | Director of Corporate Development | 1995–2007 | M&A and corporate development |
| Goodrich Corporation (Specialty Chemicals) | Finance roles (treasury/control) | Pre-1995 | Corporate finance experience |
| VLSI Technology Inc. | Industrial Engineer | Early career | Operations/engineering foundation |
External Roles
No current public board roles or external directorships disclosed for Gordon. (Not disclosed in FY2025 10-K or 2025 proxy) .
Fixed Compensation
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Base Salary ($) | 535,000 | 575,000 | 595,000 |
| Target Bonus (% of Salary) | 100% (policy) | 100% (policy) | 100% (policy) |
| Actual Non-Equity Incentive ($) | 482,000 | 685,000 | 655,000 |
| “All Other Compensation” ($) | 60,590 | 67,355 | 66,982 |
| Change in Pension Value ($) | 26,489 | 67,366 | 77,959 |
| Total Compensation ($) | 2,103,549 | 2,991,247 | 2,884,153 |
| FY2026 Base Salary Floor ($) | — | — | 625,000 (effective Jun 1, 2025) |
Performance Compensation
Annual Cash Incentive – FY2025 Design and Outcome
| Component | Max Portion of Target | FY2025 Outcome (Awarded Portion of Target) | Notes |
|---|---|---|---|
| Gross Profit Margin Improvement | 62.5% | 25% | Achieved 41.5% vs 41.2% FY2024; committee awarded 25% |
| Sales Growth Improvement | 50% | 50% | Sales growth 0.5% in low/no growth environment; awarded 50% |
| Company Initiatives & Individual Goals | 25% | 20% | Progress on MAP 2025, CS-168, digital transformation |
| SG&A Reduction | 25% | 25% | Adjusted SG&A % decreased; peers favorable |
| Committee Discretion | 25% | 15% | Peer-relative performance |
| Aggregate Outcome | — | Capped at ~110% of target | NEIP pool paid ~110% of target awards; Gordon’s payout $655,000 (110% of salary) |
Plan parameters: Gordon target 100% of salary; max 150% of salary; individual cap $2,000,000; FY2025 award $655,000 .
Long-Term Equity – Types, Metrics, and Vesting
| Award Type | Grant Date | Shares (Threshold/Target/Max) | Performance Metrics & Weights | Vesting / Schedule | Grant-Date Fair Value ($) |
|---|---|---|---|---|---|
| PERS (Performance Earned Restricted Stock) | 7/16/2025 | 1,000 / 2,000 / 2,500 | FY2025 EBIT Margin (50%); Working Capital Ratio (50%) | Awarded 970 shares (48.4% of target) | 107,272 |
| PSUs (3-year) | 7/18/2024 | Target 7,100; Max 14,200 | 3-yr Adjusted EBIT Margin (50%); 3-yr Adjusted Revenue CAGR (50%); Thr/Target/Max: 25%/100%/200% | Performance period 6/1/2024–5/31/2027; settle post-FY2027 | 811,246 |
| SARs (Options) | 7/19/2023 | 14,100 | — | Vest in four equal installments, beginning 7/18/2025; Exercise Price $114.26; Exp. 7/18/2034 | 439,638 |
| SERP Restricted Stock | 7/18/2024 | 1,147 | — | Vests on earliest of: later of attaining age 55 or 5th anniversary of May 31 preceding grant; retirement ≥65; or change in control | 131,056 |
Recent PSU results (prior cycle): PSUs for 6/1/2023–5/31/2025 vested at 0% (Adjusted EBIT margin 13.2% vs 15% target; Adjusted revenue growth 3.2% vs 6% target) — 100% forfeited .
Equity Ownership & Alignment
Beneficial Ownership (as of May 31, 2025)
| Holder | Shares Beneficially Owned | % Outstanding | Composition |
|---|---|---|---|
| Russell L. Gordon | 206,184 | 0.2% | 133,781 direct; 72,403 via SARs exercisable within 60 days |
Outstanding Equity Awards (FY2025 Year-End)
| Category | Detail | Amount |
|---|---|---|
| SERP Restricted Stock (unvested) | Shares / Market Value | 6,606; $752,027 |
| PERS (unvested) | Shares / Market Value | 4,570; $520,249 |
| PERS (unearned – FY2025 cycle max) | Max Shares / Value | 2,500; $284,600 |
| PSUs (unearned – 6/1/2024–5/31/2027) | Target Shares / Value | 45,000; $5,122,800 (max payout basis shown) |
| SARs – Exercisable/Unexercisable | Strikes and Expirations | 50.99 (7/25/2026) 30K ex ; 55.19 (7/17/2027) 30K ex ; 60.01 (7/16/2028) 30K ex ; 62.17 (7/18/2029) 20K ex ; 78.49 (7/22/2030) 20K ex ; 86.93 (7/21/2031) 15K ex / 5K unex ; 81.01 (7/18/2032) 10K ex / 10K unex ; 93.51 (7/19/2033) 5.2K ex / 15.6K unex ; 114.26 (7/18/2034) 14.1K unex |
Ownership guidelines: NEOs required to hold 5x base salary; all NEOs met or are within grace period as of May 31, 2025 . Hedging and pledging of RPM stock are prohibited by policy .
Employment Terms
| Term | Provision |
|---|---|
| Role & Contract | Employment agreement; Vice President & CFO |
| Base Salary Floor | Not less than $625,000 effective June 1, 2025 |
| Term & Renewal | Ends last day of fiscal year; auto-renews annually unless nonrenewal notice 2 months prior |
| Annual Incentive Eligibility | Incentive Plan pool; CFO target 100% salary, max 150% salary, individual cap $2,000,000 |
| Perquisites | Full-sized automobile; life insurance premiums; estate planning access; standard employee benefits |
| Clawbacks | Legacy misconduct-based clawback (2012) and NYSE restatement-based clawback (Oct 2023) in place |
| Severance (No CIC) | Lump sum = prior year incentive (if unpaid) + 1.5x base salary + pro rata average incentive (last 3 years); 18 months benefits; 6 months estate/financial planning; life insurance premium multiple; SERP restricted stock restrictions lapse; SERP cash value (18 months) |
| Severance (Within 2 yrs of CIC) | Same salary/incentive construct; 18 months benefits; 6 months estate/financial planning; life insurance premium payment grossed up for taxes; SERP cash value (18 months); lapse of transfer restrictions on 2014/2024 Omnibus awards; outplacement; excise tax gross-up (for Gordon) |
| CIC Equity Treatment | For Gordon: immediate exercisability of unvested SARs; PERS, PSUs, SERP restricted stock restrictions lapse upon CIC; excise tax gross-up eligible |
| Severance Economics (Illustrative) | “Involuntary Termination Without Cause within 2 yrs of CIC” total estimated for Gordon: $6,452,091 (includes lump sum, benefits, accelerated equity, etc.) |
Note: New-form agreements (Kinser/Crandall) include best-net alternative (no excise tax gross-up) and rely on double-trigger vesting under the 2014/2024 Omnibus Plans; Gordon’s agreement retains CIC acceleration and excise tax gross-up provisions .
Performance & Track Record
| Measure | FY2025 | Prior Periods |
|---|---|---|
| Net Sales | $7.37B (+0.5% YoY) | FY2024: $7.33B |
| Net Income (Attrib. to RPM) | $688.7M (+17.0% YoY) | FY2024: $588.4M |
| Diluted EPS | $5.35 (+17.3% YoY) | FY2024: $4.56 |
| Adjusted EBIT Margin | 13.2% | 10.6% in FY2022; +260 bps over MAP 2025 period |
| TSR (Value of $100) | $167 (Company TSR) | $158 (Peer Group TSR) |
MAP 2025 achievements: expanded gross margins by 510 bps, adjusted EBIT margins by 260 bps, improved working capital as % of sales by 320 bps (FY2022 to FY2025) .
Compensation Structure Analysis
- Mix and at-risk pay: For FY2025, Gordon’s salary was ~21% of total comp; remaining variable (equity and incentive) reflects performance orientation .
- Annual incentive governance: Committee limited payouts to ~110% of target despite per-metric awards summing higher; pool set at 1.5% of pre-tax income ($899.6M) with actual NEO payouts far below formula authorization .
- Equity performance rigor: PSUs from 2023–2025 performance cycle paid 0% due to under-target margin and revenue growth, evidencing stretch goals; PERS at 48.4% of target confirms partial attainment on working capital with EBIT margin shortfall .
- Red flags: Gordon’s CIC excise tax gross-up and single-trigger-like acceleration on equity (for Sullivan/Gordon/Kastner) are shareholder-unfriendly relative to contemporary governance norms .
Compensation Peer Group & Say-on-Pay
| Item | Detail |
|---|---|
| Peer Group (FY2025) | Akzo Nobel, Axalta, Carlisle, H.B. Fuller, Masco, PPG, Sherwin-Williams, Sika |
| Base Salary Benchmarking | NEO base salaries below 50th percentile; CFO increase due to lag vs benchmarks |
| Say-on-Pay (Oct 2024) | 93% approval |
Equity Ownership & Pledging/Hedging
- Ownership guidelines: CFO must maintain 5x base salary in common stock; met or within grace as of 5/31/2025 .
- Hedging/pledging: Prohibited for directors, officers, employees; reduces alignment risk .
Employment & Contracts – Restrictive Covenants
- Non-compete/non-solicit terms referenced within employment agreements; specific scopes not detailed publicly; release/waiver required to receive severance .
- Double-trigger vesting policy embedded in 2014/2024 plans; legacy agreements may differ (Gordon retains CIC-related accelerations) .
Risk Indicators & Red Flags
- Excise tax gross-up under CIC for Gordon (and Sullivan/Kastner) .
- CIC acceleration of unvested equity for Gordon (vs double-trigger approach of newer agreements) .
- 0% PSU vesting (2023–2025) highlights execution risk on multi-year EBIT margin and revenue growth targets .
- Insider trading policy prohibits hedging/pledging; mitigates misalignment risks .
Equity Vesting & Potential Insider Selling Pressure
- SARs vesting began July 18, 2025 for the 14,100-grant; multiple SAR tranches across 2026–2034 expirations at strikes $50.99–$114.26 may create periodic liquidity windows as installments vest; most recent unexercisable balances include 14,100 SARs expiring 2034 .
- Unvested PERS/PSUs/SERP balances imply future share delivery contingent on performance/CIC/retirement triggers; ownership guidelines constrain sales behavior .
Expertise & Qualifications
- Financial leadership across planning, development, and CFO functions; SOX certifications and internal control representations reflect governance discipline .
- Education not disclosed in RPM’s 10-K or proxy; prior engineering and finance roles denote technical and analytical capabilities .
Investment Implications
- Alignment: Strong pay-for-performance design with rigorous PSU hurdles; partial PERS awards and capped annual incentives demonstrate discipline. Gordon’s beneficial ownership (0.2%) and 5x salary guideline further align incentives .
- Execution risk: 0% PSU vesting for the 2023–2025 cycle and capped annual bonuses underscore the challenge to deliver multi-year EBIT margin and revenue growth targets; monitor MAP 2025 carryover benefits and FY2026 targets .
- Governance watch items: CIC excise tax gross-up and equity acceleration terms for Gordon are outdated vs market; not a direct trading catalyst but relevant for governance risk assessment .
- Trading signals: Upcoming SAR vesting schedules and significant outstanding equity could lead to periodic Form 4 activity as tranches vest; hedging/pledging bans mitigate adverse signals; monitor vesting dates and blackout periods .