Michael Spillane
BOSTON BEER COAbout Michael Spillane
Michael Spillane, 65, is President & CEO of The Boston Beer Company (SAM) since April 1, 2024, and has served on the Board since 2016; he previously chaired the Compensation Committee (2016–2023) and served on Nominating/Governance (since 2018) . He joined from Nike, where he led major consumer, product, and merchandising organizations; he also previously served as CEO of Converse and Umbro (Nike subsidiaries) and GM of Greater China . 2024 company results (his first year as CEO) included net revenue of ~$2.01B (+0.2% YoY), gross margin 44.4% (+200 bps), and GAAP EPS $5.06 with noted contract settlement and impairment charges; non‑GAAP EPS was $9.43 (+31.5% YoY) . The 2024 say‑on‑pay vote received 94.4% support (held prior to his first full proxy year as CEO) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Nike, Inc. | President, Consumer Creation; previously President of Categories & Product; President of Product & Merchandising; VP/GM Global Footwear; GM & VP Greater China | 2007–2023 (various) | Senior leadership across product, brand, marketplace, supply chain, and in‑store execution |
| Converse (Nike subsidiary) | Chief Executive Officer | 2009–2011 | Led iconic footwear/apparel brand operations under Nike |
| Umbro International (Nike subsidiary) | Chief Executive Officer | 2011–2013 | Led soccer brand operations based in England |
| Malden Mills; Tommy Hilfiger USA; Jockey International; Missbrenner, Inc. | Senior management roles | Pre‑2007 | Consumer/apparel leadership positions |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Supergoop (premium skincare) | Director | Current (as of 2024 press release) | Disclosed in SAM CEO appointment press release |
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Base salary (annual rate) | $861,000 | Approved Feb 16, 2024 |
| Base salary received (prorated from Apr 1 start) | $695,423 | 2024 actual |
| One‑time sign‑on cash bonus | $1,600,000 | Paid Mar 15, 2024; inclusive of relocation |
| Other compensation (benefits) | $14,269 | 401(k) match $13,800 + insurance contributions $469 |
Performance Compensation
Cash Incentive (2024)
| Item | Detail |
|---|---|
| Target bonus opportunity | 120% of full‑year base salary (not prorated) |
| Performance metrics (weights) | Depletions growth (50%), EBIT (30%), Focused cost savings (20%) |
| 2024 scale examples | Depletions: 0% payout ≤ -4% to 250% ≥ +4%; EBIT: 0% ≤ $100M to 250% ≥ $180M; Cost savings: 0% ≤ $33M to 250% ≥ $78M |
| 2024 company achievement | Cost savings $61.6M (143%); EBIT ~$144.6M (129%); Depletions -2% (46%); formulaic 90% → pool funded at 95% |
| 2024 CEO bonus paid | $981,540 (paid Mar 2025) |
Equity Awards (granted 2024)
| Award type | Grant date | Target/No. | Grant‑date FV | Vesting | Performance criteria |
|---|---|---|---|---|---|
| Performance‑based RSUs | Apr 1, 2024 | 6,570 | $2,000,039 | Vest Mar 1, 2027, subject to performance and continued employment | Two‑year CAGR of net revenue FY26 over FY23; sliding scale: 0% <0.5%, 50% at 0.5%, 100% at 2.5%, 200% at ≥4.5% |
| Time‑based stock options | Apr 1, 2024 | 21,205 | $3,000,052 | 50% vest Mar 1, 2026; 25% Mar 1, 2027; 25% Mar 1, 2028; strike $304.42 | Retention; structure approved Feb 16, 2024 |
Change‑in‑control: Equity awards include double‑trigger vesting (accelerated if termination without cause or for good reason within 12 months following a CIC). CIC defined as when Chairman C. James Koch and/or family cease to control a majority of Class B shares .
2024 Total Mix (for reference)
| Component | 2024 Amount |
|---|---|
| Base salary received | $695,423 |
| Performance cash bonus | $981,540 |
| Performance‑based RSUs | $2,000,039 |
| Time‑based stock options | $3,000,052 |
| Other compensation | $14,269 |
| Subtotal (ex‑sign‑on) | $6,691,323 |
| One‑time sign‑on | $1,600,000 |
| 2024 total compensation | $8,291,323 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 19,163 shares; less than 1% of outstanding |
| Composition detail | Includes options to acquire 8,490 Class A shares exercisable within 60 days and 10,673 unvested shares (primarily RSUs) |
| Outstanding/Unvested awards at FY2024 end | 6,570 performance RSUs (Apr 1, 2024 grant; market value $1,970,869 at $299.98) and 21,205 unexercisable options at $304.42 (exercisable schedule 50/25/25 in 2026–2028) |
| Ownership guidelines | Directors required to target 4x annual base salary (employee Director) or 4x cash retainer (non‑employee); Directors barred from selling prior to meeting guideline (with limited exceptions); 4 Directors achieved, 6 not yet as of Feb 2025 |
| Hedging/pledging | Prohibited for Directors, Officers, and Insiders; company reports no known violations since adoption |
| Trading controls | Insider trading policy; trading only in open windows or under approved 10b5‑1 plans |
Employment Terms
- Employment status and base pay: At‑will; base salary $861,000 .
- Severance on termination without Cause: Company will pay “an amount equal to your base salary” on the effective termination date (Offer Letter) .
- Non‑compete: 12 months following employment unless employment is terminated by the Company without Cause; scope covers manufacture/distribution of beverage alcohol across the Company’s territory; carve‑outs for retailers, spirits/wine‑only producers, and businesses operating solely outside the U.S. (with conditions) .
- Non‑solicitation: Prohibitions on soliciting employees, contractors, and interfering with business relationships during restriction period .
- Clawback: Amended Oct 2, 2023 to require reasonably prompt recovery of excess incentive compensation after an accounting restatement, regardless of misconduct .
- Change‑in‑control (CIC) in LTE awards: Double‑trigger acceleration (CIC plus qualifying termination within 12 months); CIC tied to loss of Class B control by Koch/family .
- Retirement vesting provision (policywide): For awards granted on/after Feb 16, 2024, continued vesting post‑retirement if ≥60 years old, ≥15 years of service, 6 months’ notice, and reaffirmation of post‑employment covenants .
Board Governance and Dual‑Role Implications
- Board service: Director since 2016; Class B Director nominee in 2025; appointed CEO on Apr 1, 2024 .
- Committees and roles: Former Compensation Committee Chair (2016–2023) and Nominating/Governance member (since 2018). Upon becoming CEO, stepped down from Lead Director and committee roles (only independent Directors may serve as Lead Director or on committees) .
- Independence and structure: Board majority independent; only independent Directors may serve on Audit, Compensation, Nominating/Governance, or as Lead Director . Roles of CEO and Chairman are separated (Jim Koch is Chairman); Lead Director is Julio N. Nemeth .
- Board/committee attendance: Five regular Board meetings in FY2024; all Directors attended ≥75% of Board and committee meetings; independent Directors met in executive session four times .
Performance & Track Record (Context)
- FY2024 company results: Depletions -2%, shipments -2.4% (~7.5M barrels), net revenue ~$2.01B (+0.2%), gross margin 44.4% (+200 bps), GAAP EPS $5.06; non‑GAAP EPS $9.43 (+31.5%) .
- Q4 2024 snapshot: Depletions flat; gross margin 39.9% (+230 bps); GAAP diluted loss per share -$3.38 reflecting contract settlement; non‑GAAP -$1.68 .
- 2025 guidance: GM 45–47%; GAAP EPS $8.00–$10.50; ads up $30–$50M YoY; depletions/shipments down low single digits to up low single digits .
Compensation Committee and Peer Benchmarking
- Committee responsibilities: Oversees executive/director pay, sets goals, evaluates performance, approves salaries/bonuses, and recommends equity awards; also oversees people & culture/succession .
- Independent consultant: FW Cook retained; assessed as independent with no conflicts; peer group reaffirmed (e.g., Brown‑Forman, Deckers, Columbia Sportswear, National Beverage, Church & Dwight, etc.) .
Related Party/Conflicts
- The company’s Related Party Transactions Policy is overseen by the Audit Committee; no material related party transactions since Jan 1, 2024 other than previously disclosed Dogfish Head items (Calagione family) .
- Offer Letter disclosure states no transactions requiring Item 404(a) disclosure for Spillane .
Investment Implications
- Pay-for-performance alignment: 2024 bonus funded at 95% on results (CAGR PSUs measured over FY23→FY26; cash bonus metrics weighted to depletions/EBIT/cost savings), skewing total comp toward performance and multi‑year outcomes .
- Near‑term selling pressure: CEO’s 2024 option grant (21,205 @ $304.42) vests starting Mar 1, 2026; options were marginally out‑of‑the‑money vs FY2024 year‑end price ($299.98), reducing near‑term monetization incentives; PSUs cliff‑vest in 2027 subject to revenue CAGR, concentrating potential supply in 2026–2027 if hurdles are met .
- Retention risk: Offer Letter provides limited cash severance (payment equal to base salary if terminated without Cause), but significant equity value is back‑weighted into 2026–2028 option/2027 PSU vesting, supporting retention .
- Governance/independence: Dual‑class structure persists (CIC tied to Class B control), but CEO/Chair separation and independent Lead Director mitigate combined power concerns; CEO is non‑independent and thus off committees .
- Alignment safeguards: Robust clawback, hedging/pledging bans, and stock ownership guidelines (4x salary) enhance alignment; Directors cannot sell before meeting guideline (with limited exceptions) .
Key upcoming vesting cliffs: options 50% on Mar 1, 2026; 25% on Mar 1, 2027; 25% on Mar 1, 2028; PSUs eligible Mar 1, 2027 subject to FY23→FY26 net revenue CAGR achievement **[949870_0001308179-25-000378_sam013244_def14a.htm:34]** **[949870_0001308179-25-000378_sam013244_def14a.htm:33]**.
Appendix: 2024 Bonus Framework and Outcome
| Metric | Weight | Scale examples | 2024 Result | Scaled Achievement |
|---|---|---|---|---|
| Depletions growth | 50% | 0% payout ≤ -4%; 100% at >0%; 250% ≥ +4% | -2% | 46% |
| EBIT ($M) | 30% | 0% ≤ $100; 100% at $138; 250% ≥ $180 | ~$144.6 | 129% |
| Focused cost savings ($M) | 20% | 0% ≤ $33; 100% at $53; 250% ≥ $78 | $61.6 | 143% |
| Formulaic payout | — | — | — | 90% |
| Pool funding | — | — | — | 95% |
CEO 2024 bonus paid: $981,540 (paid March 2025) **[949870_0001308179-25-000378_sam013244_def14a.htm:7]** **[949870_0001308179-25-000378_sam013244_def14a.htm:40]**.
Appendix: Beneficial Ownership Snapshot (Record Date Mar 19, 2025)
| Holder | Shares | % of Class A outstanding |
|---|---|---|
| Michael Spillane | 19,163 | <1% |
Notes: Footnote indicates 8,490 options exercisable within 60 days and 10,673 unvested shares in total beneficial ownership .
Investment Implications (Summary)
- Emphasis on multi‑year revenue growth PSUs and 2026–2028 option vesting supports retention and reduces near‑term selling pressure; options OTM at FY2024 year‑end further dampens early exercises .
- Cash severance is limited (base salary amount if terminated without Cause), with CIC protection confined to double‑trigger equity acceleration; combined with the non‑compete/non‑solicit, this structure favors continuity and performance delivery over guaranteed cash outcomes .
- Governance risk from dual‑class persists (CIC tied to Class B control), but separation of CEO/Chair and Lead Independent Director oversight provide counterbalances; say‑on‑pay support (94.4%) suggests current structure acceptable to shareholders as of 2024 .