Jeffery Tolnar
Shoals Technologies GroupAbout Jeffery Tolnar
Jeffery Tolnar (age 61) is President of Shoals Technologies Group, Inc. (SHLS) since December 2022; he served as Interim CEO from March 15, 2023 to July 17, 2023 and joined Shoals in April 2021 as SVP, EV Solutions. He holds an MBA from Baker University and a BS in Electrical & Electronics Engineering from Youngstown State University . Company performance during his executive tenure saw 2024 revenue at $399.2M (down 18.3% YoY) alongside Adjusted EBITDA of $99.1M (versus $173.4M in 2023) and a decline in the $100 TSR index from $45.80 (2023) to $16.30 (2024) . Incentive metrics for executives emphasize Adjusted EBITDA, Adjusted Free Cash Flow, Net Revenue Growth CAGR, and Cumulative Adjusted Diluted EPS, with relative TSR modifiers applied to growth metrics in PSUs .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Shoals Technologies Group, Inc. | SVP, EV Solutions | Apr 2021–Dec 2022 | Built EV offerings, pathway to executive leadership |
| Greenlots (acquired by Shell plc) | Chief Commercial Officer | Oct 2017–Apr 2021 | Led commercial growth in turnkey EV charging solutions |
| Honeywell (Homes, Buildings & Utilities) | President, Global Software Solutions | Jul 2016–May 2017 | Scaled software across building technologies and utilities |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| IONATE Limited | Chairman of the Board | Since Jun 2023 | Tech company developing Hybrid Intelligent Transformers |
| Smith Seckman Reid, Inc. | Director; Chair, Enterprise Risk Committee | Ongoing | Engineering firm; governance and risk oversight |
Fixed Compensation
| Year | Base Salary Level ($) | Target Bonus % (AIP) | Actual Bonus Paid ($) |
|---|---|---|---|
| 2022 | — | — | 201,849 |
| 2023 | 415,000 | — | 597,188 |
| 2024 | 440,000 | 75% of base | 154,405 |
Performance Compensation
2024 Annual Incentive Plan (Revised mid-year)
| Metric | Weight | Target (H2 2024) | Actual | Payout (% of target) | Tolnar Payout ($) | Vesting |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 60% | $54.9M | $50.7M | 74.5% (Threshold) | 92,643 | Cash; paid 2025 |
| Adjusted Free Cash Flow | 15% | $30.4M | $30.4M | 200% (Stretch) | 23,160 | Cash; paid 2025 |
| Individual Goals | 25% | Defined by MBOs | 80% of target | 80% | 38,601 | Cash; paid 2025 |
| Total (capped at 50% of original FY opportunity) | — | — | — | — | 154,405 | — |
Key AIP design points: Metrics and weights (60% Adjusted EBITDA, 15% Adjusted FCF, 25% Individual Goals); H2-only measurement; payout cap at 50% of original FY plan; no changes to in-cycle PSU cycles .
Long-Term Incentive Awards (2024 grants and retention)
| Award Type | Grant Date | Shares (#) | Grant-Date Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|
| PSUs (Target) | Feb 27, 2024 | 38,987 | 600,009 | 3-year (to 12/31/2026); 50% Net Revenue Growth CAGR with relative peer modifier; 50% Cumulative Adjusted Diluted EPS; 0–200% payout |
| RSUs | Feb 27, 2024 | 38,987 | 600,009 | 3 equal annual installments starting Mar 4, 2024 anniversaries |
| RSUs (Retention) | Jul 8, 2024 | 32,895 | 200,001 | 2/3 vest on Jun 1, 2026; 1/3 on Jun 1, 2027 |
PSU cycle outcomes: 2022–2024 PSUs paid at 64.4% of target (Net Revenue Growth CAGR 23.3% → 55% achievement; Average Gross Margin 35.9% → 73.8% achievement); Tolnar received 12,206 shares valued at $4.10/share ($50,045) . Management expects 2023–2025 and 2024–2026 PSUs to forfeit (zero payout) absent goal modifications due to below-threshold performance .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 38,451 shares (includes 3,594 RSUs vesting within 60 days of Mar 6, 2025) |
| % of shares outstanding | ~0.02% of 167,115,267 Class A shares (38,451 / 167,115,267) |
| Unvested RSUs (by grant) | 3,594 (3/31/2021) ; 6,318 (4/18/2022) ; 6,056 (1/18/2023) ; 38,987 (2/27/2024) ; 32,895 (7/8/2024) |
| Unvested PSUs (by grant) | 18,954 (4/18/2022) ; 9,085 (1/18/2023) ; 19,494 (2/27/2024) |
| Options | None (no company options outstanding at FY2024) |
| Hedging / pledging | Prohibited for directors and officers |
| Ownership guidelines | 2x annual base salary for executive officers |
| Guideline compliance | Not disclosed for Tolnar |
Upcoming vesting events (potential selling pressure indicators):
- Jul 8, 2024 retention RSUs: 2/3 vest Jun 1, 2026; 1/3 vest Jun 1, 2027 .
- Feb 27, 2024 RSUs: equal annual tranches on each of the first three anniversaries of Mar 4, 2024 .
- Jan 18, 2023 RSUs: equal annual tranches on each of the first three anniversaries of Dec 4, 2022 .
- Apr 18, 2022 RSUs: equal annual tranches on each of the first three anniversaries of Mar 7, 2022 .
- Mar 31, 2021 RSUs: 25% each year; remaining unvested as of 12/31/2024 (likely vested by Mar 31, 2025) .
Employment Terms
| Provision | Key Terms |
|---|---|
| Offer letter | December 2022 offer letter as President; perpetual confidentiality; 1-year non-compete and non-solicit; limited severance superseded by Severance Plan |
| Severance Plan eligibility | Covered along with CEO, CFO, CAO |
| Termination without cause or resignation for good reason | 12 months base salary (Tolnar: $440,000) + COBRA differential reimbursements during severance period |
| Change-in-control (CIC) + qualified termination (double trigger) | 12 months base + target annual bonus (Tolnar: $770,000 total) + COBRA reimbursements |
| Equity treatment (general) | No single-trigger vesting; RSUs accelerate only if not assumed at CIC or upon double-trigger post-CIC; PSUs accelerate at target upon double-trigger post-CIC; prorated vesting for death/disability; limited vesting for termination without cause |
| Defined “cause”/“good reason” | Company-wide Severance Plan definitions; good reason includes material diminution or relocation >50 miles (notice/cure applies) |
Potential payments (as of 12/31/2024, at $5.53/share):
- Termination without cause (non-CIC): Cash $440,000; RSUs $281,444; PSUs $67,499; COBRA $12,573 .
- CIC + qualified termination: Cash $770,000; RSUs $485,811; PSUs $316,073; COBRA $12,573 .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Adjusted EBITDA ($M) | 93.0 | 173.4 | 99.1 |
| Company TSR – Value of $100 Investment | $72.71 | $45.80 | $16.30 |
| Revenue ($M) | — | — | $399.2; down 18.3% YoY |
Achievements and context:
- 2024: Order backlog and awarded orders $635M; gross profit % up 120 bps; industry-wide delays pushed significant utility-scale installations into 2025+ . Executive incentives revised mid-year; PSU cycles maintained without goal modifications; retention RSUs granted in exceptional circumstances .
Compensation Structure Analysis
- Pay mix: Variable comp exceeds fixed; 50% PSUs and 50% RSUs for LTI; 2024 one-time retention RSUs ($200,001 for Tolnar) reflect retention priority amid sector volatility .
- AIP design shift: H2-2024 targets with payout cap (50% of FY opportunity) and 2025 move to two six-month periods to better match industry uncertainty .
- PSU metrics toughening: 2024 PSUs replace Gross Margin with Cumulative Adjusted Diluted EPS and add relative growth modifier—raises performance sensitivity; two in-cycle PSU periods expected at zero payout .
- Governance safeguards: Clawback policy compliant with Nasdaq 5608; hedging/pledging prohibited; no excise tax gross-ups; double-trigger CIC vesting (no single-trigger) .
Compensation Peer Group & Shareholder Feedback
- 2025 peer group updated to size and industry-relevant solar/renewables/electrical components cohort (e.g., Altus Power, Ameresco, American Superconductor, Fluence, Helios, Nextracker, Array, Littelfuse, SolarEdge, Sunrun, ESCO Technologies, Gibraltar, Power Integrations, Rogers) .
- 2024 say-on-pay approval ~82%, indicating general support for pay programs despite turbulent results .
Equity Ownership & Pledging
- Stock ownership guidelines: 2x salary for executive officers; 50% net shares retention until guidelines met .
- Hedging/pledging: Prohibited for all officers and directors, reducing misalignment and collateralization risk .
Risk Indicators & Red Flags
- Mid-flight AIP revisions and one-time retention awards indicate elevated retention risk in sector downturn; however, PSU cycles were not modified and expected to pay zero for two cycles, preserving downside rigor .
- No hedging/pledging and no single-trigger CIC vesting reduce governance risk; limited perquisites for Tolnar in 2024 (401k match and life insurance only) .
Investment Implications
- Alignment: Tolnar’s pay heavily tied to multi-year financial metrics (Adjusted EPS, revenue CAGR with relative modifier), supporting pay-for-performance; expected zero PSU payouts for 2023–2025 and 2024–2026 demonstrate downside sensitivity .
- Retention vs. pressure: Significant unvested RSUs with cliffs in 2026–2027 may create future selling pressure around vest dates; hedging/pledging ban mitigates misalignment risk .
- Change-in-control economics: Double-trigger severance (salary + target bonus) and targeted equity acceleration are market-standard, not excessive, and lack tax gross-ups; reduces takeover friction while protecting continuity .
- Execution risk: Sector-wide project delays materially impacted 2024 results and TSR; 2025 incentive redesign to two six-month periods should improve motivational alignment amid volatility .