Matthew Horvath
About Matthew Horvath
Matthew R. Horvath, age 39, is Chief Financial Officer and Treasurer of Stoneridge, Inc., appointed in September 2021 after leading Corporate Strategy and Investor Relations; prior experience includes six years in EY’s Transaction Advisory practice focused on automotive/transportation valuation . Company performance under his finance tenure reflects cyclicality and macro headwinds: net sales were $899.9M (2022), $975.8M (2023), and $908.3M (2024), with operating income moving from $2.9M (2022) to $12.8M (2023) and a slight operating loss of $(0.4)M (2024) . Stoneridge’s cumulative total shareholder return index declined from 67 (2021) to 21 (2024), while the year-end 2024 share price was $6.27 versus $19.57 in 2023, underscoring challenging equity performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Stoneridge, Inc. | CFO & Treasurer | Sep 2021–present | Led finance through downturn; increased operating cash flow via working capital reductions . |
| Stoneridge, Inc. | Exec Director, Corporate Strategy & IR | Sep 2020–Aug 2021 | Drove investor relations and strategic planning . |
| Stoneridge, Inc. | Director, Investor Relations | Nov 2016–Aug 2020 | Built market-facing communications, supported capital markets access . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| EY (Ernst & Young) | Transaction Advisory (valuation) | 2010–2016 | Automotive/transport valuation expertise (deal modeling, asset/business valuation) . |
Fixed Compensation
| Metric (2024) | Amount/Detail |
|---|---|
| Base Salary | $474,375 |
| Target Bonus % of Base | 60% |
| Target Bonus ($) | $284,625 |
| Actual Bonus Paid (AIP) | $42,694 (15% of target based on consolidated results) |
| Perquisites | 401(k) match $13,800; group term life $198; no auto allowance . |
Performance Compensation
Annual Incentive Plan (AIP) – 2024
| Metric | Weight | Target | Actual | Payout as % of AIP Target |
|---|---|---|---|---|
| Consolidated Operating Income | 70% | $35.7M | $3.8M | 0% |
| Consolidated Cash Flow | 30% | $18.4M | $28.6M | 50% |
| Overall Weighted Achievement (Horvath) | — | — | — | 15% |
Notes: Cash Flow only pays above threshold if Operating Income meets threshold; it did not, capping Cash Flow at threshold (50% payout). Horvath’s achieved payout equaled 15% of target .
Long-Term Incentive Plan (LTIP) – Structure and 2024 Grant
| Component | Weight | Metric Design | Target/Reference | Vesting |
|---|---|---|---|---|
| Performance Shares – TSR | 25% | Relative TSR vs 2024 Comparator Group; payout from 0–200% based on percentile | Earned shares scale: <30th=0%; 30–49th=50–99%; 50–100th=100–200% | At end of 3-year period (3/1/2027) . |
| Performance Shares – EPS | 20% | Avg actual EPS vs annual budget over 3 years | 2024 target $0.30; 2024 actual $(0.47) | End of 3-year period (3/1/2027) . |
| Performance Shares – ROIC | 10% | Avg actual ROIC vs annual budget over 3 years | 2024 target 5.4%; 2024 actual 0.2% | End of 3-year period (3/1/2027) . |
| Time-based RSUs | 45% | Retention (cliff vest) | Grant-date fair value included in stock awards | Cliff vest on 3/1/2027 . |
2024 Grant Detail (Horvath):
- Performance Shares (2024 grant): Threshold 7,848; Target 15,697; Max 31,394; vest 3/1/2027 .
- Time-based RSUs (2024 grant): 12,844; vest 3/1/2027 .
- Grant-date fair value of 2024 stock awards: $493,545 .
Historical LTIP outcomes: The 2022 performance share grant paid 0% (EPS, ROIC, TSR all below threshold), with RSUs vesting 3/3/2025 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 13,888 common shares; less than 1% of outstanding . |
| Ownership Guidelines | Executives must hold 3× base salary; 5-year accumulation period; sales restricted until compliant . |
| Anti-Hedging/Pledging | Hedging and pledging of company stock prohibited . |
Outstanding Equity Awards (as of 12/31/2024):
| Award Type | Units | Vest Date | Market/Payout Value Basis |
|---|---|---|---|
| Time-based RSUs (2019–2022 cycle) | 6,423 | Vested 3/3/2025 | $40,401 (value at 12/31/2024) . |
| Time-based RSUs | 9,052 | 3/2/2026 | $56,937 . |
| Time-based RSUs | 12,844 | 3/1/2027 | $80,789 . |
| Performance Shares (scheduled) | 5,530 | 3/2/2026 | $34,784 (threshold shown; forecast below threshold) . |
| Performance Shares (scheduled) | 9,275 | 3/1/2027 | $58,340 (threshold shown; forecast below threshold) . |
| Phantom Share Units | 29,103 | 6/20/2025 | $183,058 . |
Notes: 2025 performance share outcomes (for earlier grants) were below threshold; future PSUs currently forecast below threshold for TSR/EPS and between threshold/target for ROIC .
Employment Terms
| Provision | Matthew Horvath Terms |
|---|---|
| Severance (no cause) | 12 months base salary plus continued health/welfare benefits for 12 months (company Severance Plan) . |
| Change-in-Control (CIC) | Double-trigger; 2× base salary and 2× target annual incentive; pro rata AIP for year of termination; 24 months of benefits; no excise tax gross-up (safe harbor/280G cutback) . |
| Non-compete/Non-solicit | Required for CIC benefits (non-compete, non-solicitation, non-disparagement) . |
| Clawback/Recovery | NYSE-compliant Recovery Policy effective 9/13/2023; recoup excess incentive comp for 3 prior years post restatement . |
| Deferred Compensation | Plan available (up to 80% salary/100% AIP/100% LTIP deferrals); no NEO deferrals in 2024 . |
Hypothetical Value of Payments (if terminated on 12/31/2024):
| Scenario | Total ($) | Key Components |
|---|---|---|
| Termination Without Cause | $908,505 | Base $474,375; benefits $28,302; accelerated equity $405,828; prorata AIP $42,694 . |
| CIC + Good Reason / Without Cause | $1,902,177 | 2× base $948,750; 2× target AIP $569,250; prorata AIP $42,694; benefits $56,603; accelerated equity $577,034; 280G reduction $(292,154) . |
Performance & Track Record
Company financials:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Net Sales ($000s) | $899,923 | $975,818 | $908,295 |
| Operating Income ($000s) | $2,935 | $12,836 | $(381) |
| Net (Loss) Income ($000s) | $(14,056) | $(5,183) | $(16,524) |
Shareholder outcomes:
| Index/Price | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|
| SRI TSR Index | 100 | 103 | 67 | 74 | 67 | 21 |
| Share Price (Dec 31) | — | — | — | — | $19.57 | $6.27 |
AIP metrics emphasize operating income and cash flow; LTIP uses TSR, EPS, ROIC over multi-year periods, aligning with shareholder value and profitability goals . Management highlighted operating cash flow improvement via inventory and working capital reduction in 2024 .
Compensation Structure Analysis
- Year-over-year mix: 2024 stock awards for Horvath were $493,545 with RSUs and performance shares; no options granted—equity is split between at-risk PSUs (55%) and time-based RSUs (45%), increasing retention but preserving performance leverage via TSR/EPS/ROIC .
- AIP discipline: 2024 Operating Income below threshold capped Cash Flow at threshold, yielding only 15% of target AIP—consistent with pay-for-performance .
- Governance safeguards: Anti-hedging/pledging; stock ownership guidelines; NYSE-compliant recovery policy; no excise tax gross-ups (280G safe harbor/cutback) .
- Peer benchmarking: Targets set near 50th percentile of comparator group; TSR peer group includes auto/industrial suppliers; 2022 PSUs paid 0% on underperformance (guardrails against windfall) .
Risk Indicators & Red Flags
- Equity performance/TSR: Significant decline through 2024; 2022–2024 PSUs not earned, indicating underperformance versus targets .
- Credit facility covenant relief: Leverage/coverage ratio relief in 2025 elevates financing risk sensitivity; focus on deleveraging and inventory reductions .
- Hedging/pledging and clawbacks mitigate misalignment/abuse risk; say‑on‑pay support was 99% at 2024 meeting, signaling shareholder acceptance of design .
Equity Ownership & Selling Pressure Outlook
- Near-term vestings: Phantom shares vest 6/20/2025 (29,103 units, cash-settled), potential liquidity event; RSUs vest 3/2/2026 (9,052) and 3/1/2027 (12,844), with tax withholding potentially prompting share sales .
- PSU outlook: Current forecast below threshold for TSR/EPS (and between threshold/target for ROIC), limiting incremental share delivery from performance awards in 2026–2027 .
Employment Terms – Change-of-Control Economics
- Double-trigger CIC (2× base + 2× target bonus + pro-rata AIP + 24 months benefits) balances retention with shareholder alignment; safe-harbor/280G cutback instead of gross-up is shareholder-friendly .
Say-on-Pay & Shareholder Feedback
- 2024 Say‑on‑Pay approval was 99%, indicating strong support for pay practices and performance linkage .
Investment Implications
- Alignment: Strong pay-for-performance mechanics (AIP thresholds, multi-factor PSUs) and governance policies (anti-hedging/pledging, clawbacks, ownership guidelines) support alignment; however, repeated PSU shortfalls underscore execution risk on profitability and TSR .
- Retention: RSU cliffs through 2027 and CIC double-trigger protections reduce near-term retention risk; severance/covenants are standard for peers .
- Trading signals: 2025 phantom unit vest and 2026 RSU vesting create potential selling/withholding flows; limited PSU conversions reduce additional supply near-term . Weak TSR and covenant relief suggest continued emphasis on cash generation and margin recovery—watch quarterly AIP drivers (operating income, cash flow) and LTIP progress (EPS/ROIC) through 2025–2027 for improving payout trajectories .