Karla R. Lewis
RELIANCEAbout Karla R. Lewis
Karla R. Lewis is President and Chief Executive Officer of Reliance, Inc. (RS), serving as CEO since January 2023; she joined Reliance in 1992 as Corporate Controller, became CFO in 1999 (serving through January 2021), was appointed President and Director in January 2021, and is a certified public accountant (inactive) who began her career at Ernst & Young LLP (Ernst & Whinney) . She is 59 years old and serves on the board of directors of the Metals Service Center Institute and The Goodyear Tire & Rubber Company (Finance Committee Chair; Governance Committee member) . Reliance reported 2024 net sales of $13.84 billion, EPS of $15.56, gross profit margin of 29.7%, cash flow from operations of $1.43 billion, and annual ROA of 11.57% (with three-year ROA for the 2022–2024 PSU performance period of 17.86%), underscoring resilient performance in a declining metals price environment . Company stock performance context in the proxy shows an all‑time high closing price of $340.04 on April 5, 2024 and a 16.9% CAGR since the 1994 IPO (company-wide, not specific to her CEO tenure) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Reliance, Inc. | President & Chief Executive Officer | Jan 2023 – Present | Leads strategy, capital allocation, M&A oversight; long-time relationships with investors and deep operational/financial knowledge . |
| Reliance, Inc. | President; Director | Jan 2021 – Dec 2022 | Transition to CEO; board service begins in 2021 . |
| Reliance, Inc. | Senior Executive VP & Chief Financial Officer | Mar 2015 – Jan 2021 | Oversaw finance; proven ability to raise debt and equity capital . |
| Reliance, Inc. | Chief Financial Officer | 1999 – Jan 2021 | Led finance through significant growth and >75 acquisitions since IPO . |
| Reliance, Inc. | Corporate Controller (earlier roles) | 1992 – 1999 | Progressively senior finance responsibilities after joining Reliance . |
| Ernst & Young LLP (Ernst & Whinney) | Professional staff positions | Pre-1992 | CPA (inactive); foundational audit/finance experience . |
External Roles
| Organization | Role | Years | Committee/Focus |
|---|---|---|---|
| The Goodyear Tire & Rubber Company | Independent Director | Current | Finance Committee Chair; Governance Committee member . |
| Metals Service Center Institute (MSCI) | Director | Current | Industry leadership and advocacy . |
Fixed Compensation
| Item | 2024 Detail |
|---|---|
| Base Salary (end of year) | $1,300,000 . |
| Target Annual Cash Incentive (% of salary) | 150% (135% Pretax Income Margin; 15% Tons Sold Growth) . |
| Actual Annual Cash Incentive Paid | $2,805,400 (215.8% of base salary) . |
| Perquisites | None for NEOs . |
Performance Compensation
- Design overview: In 2024 and 2025, 80% of the CEO’s target equity is performance‑based (PSUs) and 20% is service‑based RSUs; annual cash incentive weighted 90% Pretax Income Margin and 10% Tons Sold Growth in 2024 (with increased Tons Sold weighting for 2025), reinforcing pay-for-performance .
Annual Cash Incentive (2024 Mechanics and Outcome)
| Metric | Weight at Target | Threshold | Target | Maximum | 2024 Actual | 2024 Payout |
|---|---|---|---|---|---|---|
| Pretax Income Margin | 90% (135% of salary) | 5.00% → 20% of salary | 7.50% → 135% of salary | 10.00% → 270% of salary | 8.44% | 185.8% of salary (interpolated) . |
| Tons Sold Growth vs MSCI | 10% (15% of salary) | = MSCI → 0% | +1.0% → 15% | +2.0% → 30% | +6.0% | 30% of salary (max) . |
| Total | 100% | — | — | — | — | 215.8% of base salary . |
Long‑Term Equity (RSUs/PSUs)
| Feature | 2024 Grant Structure / Status |
|---|---|
| PSU performance metric | Three‑year ROA; 2024 targets: Threshold 7.00%, Target 10.00%, Max 13.00% (linear interpolation) . |
| 2022 PSU performance result (vested in 2024) | ROA for 2022–2024 performance period: 17.86% → 200% of target vested (max) . |
| 2024 equity mix | CEO target equity: 80% performance‑based; 20% service‑based . |
| 2024 vesting/settlement (realized) | Shares acquired on vesting in 2024: 46,888; value realized $15,285,450 (includes performance awards determined in 2024) . |
Lewis – Specific Vesting Schedules (Unvested/Vested but Unsettled RSUs)
| Grant Date | Service-based RSUs vest | Performance-based RSUs vest |
|---|---|---|
| 3/22/2022 | — | 31,136 on 12/31/2024 . |
| 2/17/2023 | 5,809 on 12/1/2025 | 46,474 on 12/31/2025 . |
| 2/13/2024 | 5,125 on 12/1/2026 | 41,002 on 12/31/2026 . |
Equity Ownership & Alignment
- Beneficial ownership (3/28/2025): 81,697 RS shares directly/indirectly; “less than 1%” of outstanding; excludes 16,047 unvested service‑based RSUs noted separately in the proxy footnote .
- Unvested/Unearned awards at 12/31/2024 (CEO): 10,934 service‑based RSUs ($2,944,089 market value) and 118,612 performance‑based RSUs reported at maximum for SEC presentation ($31,937,467 market value) at $269.26 per share .
- Stock ownership guidelines: CEO 5x base salary; value of common stock held $27,982,152 → 21.5x base pay; in compliance .
- Hedging and pledging: Prohibited for directors and executive officers (and designated insiders) .
- Ownership and retention requirements apply to all directors and officers .
Employment Terms
| Provision | Detail |
|---|---|
| Employment agreements | None with any executive officer, including CEO; no cash severance arrangements . |
| Equity vesting on separation | Pro‑rata vesting for service‑based RSUs; performance‑based RSUs vest pro‑rata only upon achievement measured over shortened period, if (i) qualifying retirement, death, or disability, or (ii) termination without cause following a change in control (double trigger) . |
| CIC acceleration | Double‑trigger only for equity; no single‑trigger cash severance . |
| Confidentiality | Executives are subject to confidentiality and trade secrets agreements . |
| Clawback | SEC/NYSE‑compliant clawback covering incentive cash and equity . |
| Perquisites / Tax gross‑ups | No perquisites for NEOs; no tax gross‑ups . |
| SERP | CEO is the only remaining active participant; benefit equals 38% of average of highest five years of total cash comp over final ten years; present value of accumulated SERP benefit: $11,364,145 (33 years credited service) . |
Estimated Benefits Upon Termination or Change in Control (as of 12/31/2024)
| Scenario | Cash Severance | Accelerated Incentive Comp | Benefits Continuation | Pension/Nonqualified Benefit | Total |
|---|---|---|---|---|---|
| Qualified Retirement | $0 | $13,098,931 | $0 | $1,670,516 | $14,769,447 |
| Termination for Cause | $0 | $0 | $0 | $0 | $0 |
| Termination Without Cause | $0 | $0 | $0 | $0 | $0 |
| Termination Without Cause Following CIC (Double Trigger) | $0 | $13,098,931 | $0 | $2,066,207 | $15,165,138 |
| CIC Only | $0 | $0 | $0 | $0 | $0 |
| Death | $0 | $13,098,931 | $0 | $0 | $13,098,931 |
| Disability | $0 | $13,098,931 | $0 | $1,670,516 | $14,769,447 |
Board Governance
- RS board/roles: Lewis has been a director since 2021 and is not independent as the sitting President & CEO; she holds no board committee assignments at RS .
- Board leadership: RS has an independent, non‑executive Chair (Douglas W. Stotlar) effective January 2025; all standing committees consist solely of independent directors .
- Attendance: Over 90% committee meeting attendance by current board members in 2024 (board‑wide disclosure) .
- Governance safeguards: Stock ownership and retention requirements; prohibition on hedging/pledging; annual board and committee self‑evaluations; executive sessions; majority voting for directors .
- External board service (Goodyear): Lewis serves as Finance Committee Chair and on the Governance Committee .
Compensation Committee Analysis and Peer Benchmarking
- Independent compensation oversight: Independent Compensation Committee and independent consultant (Pay Governance) .
- Peer group (unchanged for 2024): Includes industrials and metals companies (e.g., AGCO, Alcoa, CMC, Dover, Eaton, ITW, LKQ, Nucor, Parker-Hannifin, PACCAR, Steel Dynamics, U.S. Steel, W.W. Grainger, WESCO, Wabtec) .
- Relative positioning (2024): RS revenue at 36th percentile; Pretax Income Margin at 48th percentile; ROA at 68th percentile (and 80th percentile over five years) vs peer group .
- Target pay levels: CEO and CFO target total direct compensation around the 30th percentile; COO around the 70th; other NEO around the 60th percentile vs peer group .
- Say‑on‑pay: 89% approval in 2024 and at least 89% approval each year 2020–2024 .
Performance & Track Record (Company context during her leadership)
| Metric | 2024 | 2023 |
|---|---|---|
| Net Sales | $13.84 billion | $14.81 billion |
| EPS (Diluted) | $15.56 | $22.64 |
| Cash Flow from Operations | $1.43 billion | $1.67 billion |
| Gross Profit Margin | 29.7% | 30.7% |
| Annual ROA | 11.57% | 16.70% |
| Tons Sold Growth vs MSCI | +6.0% | +2.2% |
| Capital Returned (dividends + buybacks) | $1.34 billion | — |
- Strategic actions: Four accretive acquisitions in 2024 (Cooksey Iron & Metal; American Alloy Steel; Mid‑West Materials; toll processing assets of FerrouSouth) and strong capital returns with record $1.09 billion share repurchases in 2024 .
- Dividend discipline: 65 consecutive years of dividends; 32 increases since 1994; current quarterly dividend rate $1.20 per share for Q1 2025 .
Risk Indicators & Red Flags
- No employment agreements; no cash severance or excise tax gross‑ups (limits guaranteed pay/entitlements) .
- Double‑trigger CIC equity; clawback in place; prohibits hedging and pledging (reduces misalignment/hedging risk) .
- Ownership compliance substantially above guideline (21.5x vs 5x requirement) .
- 2025 plan change increases Tons Sold Growth weighting in annual incentive, sharpening focus on growth (while aggregate target opportunity unchanged) .
Compensation Structure Signals
- High performance leverage: Approximately 74% of CEO target total direct compensation tied to performance in 2024; 80% of CEO equity awards are performance‑based in 2024 and 2025 .
- More demanding goals: 2024 raised pretax income margin targets in AIP and increased ROA targets in PSUs; 2022–2024 PSUs paid at max (200%) on 17.86% three‑year ROA .
- No perquisites and broad equity distribution across management, with minimum one‑year vesting (limited exceptions) .
Equity Vesting & Potential Selling Pressure
- Upcoming vesting events: Service‑based RSUs scheduled 12/1/2025 (5,809) and 12/1/2026 (5,125); PSUs scheduled 12/31/2025 (46,474 at target; earnout depends on ROA) and 12/31/2026 (41,002 at target; earnout depends on ROA) .
- Outstanding exposure: At 12/31/2024, 10,934 service‑based RSUs and 118,612 performance‑based RSUs (at max presentation for SEC rules) remained unvested, representing a sizable pipeline of equity that could create liquidity events upon vesting (subject to trading windows and plan rules) .
- Policy guardrails: Hedging and pledging not permitted; RS has stock ownership and retention requirements that mitigate misalignment risk .
Investment Implications
- Alignment is strong: High proportion of at‑risk, performance‑based pay and strict ownership/hedging policies align incentives with long‑term value creation; CEO equity weighting at 80% performance‑based further tightens alignment .
- Retention anchored by equity and SERP: No employment agreement or cash severance increases reliance on unvested equity and a substantial SERP (PV $11.36 million) to retain the CEO; double‑trigger equity terms provide protection without single‑trigger cash payouts .
- Watch vesting cadence as trading signal: 2025–2026 service and performance vest dates and the large outstanding RSU balances may create periodic selling pressure around windows, though policy restrictions and ownership guidelines provide counter‑incentives to rapid disposition .
- Incentive calibration tilts to profitable growth: 2025 AIP increases Tons Sold Growth weighting, complementing Pretax Income Margin and three‑year ROA PSUs, which together encourage efficient asset use and volume growth—key levers in metals service center economics .
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