Matthew P. Pauli
About Matthew P. Pauli
Senior Vice President and Chief Financial Officer of STRATTEC since November 13, 2024; age 46 at appointment. He is a seasoned finance executive with ~24 years’ experience across industrials and public-company finance leadership, and holds a BBA in Accounting from the University of Wisconsin–Whitewater . During FY2025 (his first year at STRATTEC), company performance strengthened: net sales rose 5.1% YoY, gross margin improved 280 bps, EBITDA margin reached 6.6%, cash from operations was $71.6M vs $51.7M target, and FY2025 TSR equated to $184.91 on a $100 base; FY2025 net income was $18.685M . The fiscal year closed with a $61.02 share price (52-week range: $61.02/$22.65) as the company executed on operational and cash-generation goals that fully maximized the annual bonus plan .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| CentroMotion (private) | Executive Advisor and CFO | 5 years (prior to Nov 2024) | Led global finance, IT and legal; implemented forecasting/reporting, improved working capital velocity, supported footprint and value creation initiatives . |
| Enerpac Tool Group (NYSE: EPAC) | Corporate Controller/Chief Accounting Officer; VP Finance | Not disclosed | Progressively senior corporate and segment finance leadership roles at a U.S.-listed industrial manufacturer . |
| Ernst & Young | Audit professional | 8 years | Began career in audit; foundational financial reporting and controls experience . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| — | No current public-company board roles disclosed in STRT filings | — | — . |
Fixed Compensation
| Item | FY2025 |
|---|---|
| Base salary (annualized) | $470,000 |
| Salary paid (partial year from Nov 13, 2024) | $299,173 |
| Target annual bonus (% of base) | 60% |
| Target annual bonus ($) | $282,000 |
| Actual annual bonus paid (Non-Equity Incentive Plan) | $564,000 (200% of target) |
| Stock awards (grant-date fair value) | $212,520 (new-hire RSAs) |
| All other compensation | $6,738 total: $5,875 401(k) match; $863 life insurance |
| Benefits/perks (plan terms) | 401(k) match 100% of first 5% pay; life insurance = 2× base salary up to $500k; SERP credits 8% of base+bonus with 5-year vest; interest at 120% long-term AFR; lump-sum only |
Performance Compensation
Annual STIP (Short-Term Incentive Plan) – FY2025 design and payout
- 100% formulaic; two equally weighted company financial metrics (EBITDA and Cash Flow from Operations); payout range 0–200% of target .
- FY2025 results exceeded max on both metrics; payout at 200% of target .
| Metric | Weight | Threshold | Target | Maximum | FY2025 Result | Payout vs Target |
|---|---|---|---|---|---|---|
| EBITDA ($M) | 50% | 20.6 | 22.9 | 34.3 | 41.6 | 200% |
| Cash Flow from Operations ($M) | 50% | 38.7 | 51.7 | 64.6 | 71.6 | 200% |
Notes:
- STIP amounts are earned for the fiscal year and paid in August following year .
- Pauli’s FY2025 STIP target opportunity was $282,000; paid $564,000 at 200% .
Long-Term Incentives (LTI)
- FY2025 awards for Pauli were one-time, time-based new-hire RSAs only; no PSUs/options granted. He becomes eligible for the 2024 Equity Incentive Plan’s regular annual LTI cycle beginning FY2026 (Committee discretion) .
- Company currently does not grant stock options or SARs as a matter of practice .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total beneficial ownership | 5,191 shares (all unvested RSAs) |
| Ownership % of outstanding | 0.1% (based on 4,160,284 shares outstanding) |
| Vested vs unvested | 0 vested; 5,191 unvested RSAs |
| Options (exercisable/unexercisable) | None disclosed; company does not grant options |
| Market value of unvested RSAs at FY-end | $316,755 (5,191 × $61.02 closing price on 6/27/25) |
| Stock ownership guidelines (NEOs other than CEO) | 2× annual base salary; must hold all net vested shares until compliant |
| Hedging/pledging | Prohibited for executive officers; margin accounts holding STRT and pledging STRT as collateral are not permitted |
Equity Award Detail and Vesting Schedule
| Grant date | Type | Shares | Grant-date fair value | Vesting terms | Additional details |
|---|---|---|---|---|---|
| Nov 13, 2024 | Restricted Stock (new-hire RSAs) | 5,191 | $212,520 | Vests 1/3 on each of the first three anniversaries of grant (i.e., 11/13/2025, 11/13/2026, 11/13/2027), subject to continued service | Award sized off 20-day average pre-hire-date price; sole equity award in FY2025 intended to make whole forfeited awards |
Employment Terms
| Term | Key provisions |
|---|---|
| Effective date and term | Employment effective Nov 13, 2024; initial 1-year term through Nov 12, 2025; automatically renews one-year terms unless either party gives ≥60 days’ non-renewal notice |
| Base salary | $470,000 (initial annual base; subject to Board adjustments) |
| Bonus eligibility | FY2025 STIP target 60% of base; plan is company-metric-only (EBITDA and CFO), with payouts 0–200%; paid in August following year |
| LTI eligibility | Eligible to participate in 2024 Equity Incentive Plan beginning FY2026 (Compensation Committee discretion) |
| Non-compete / confidentiality | Non-compete during employment and for the shorter of (i) one year post-termination or (ii) duration of service; confidentiality during employment and for two years post-termination |
| Benefits | 401(k) match 100% on first 5% wages; group term life 2× salary up to $500k; SERP credits 8% of base+bonus with 5-year vest; interest crediting at 120% LT AFR; lump-sum-only distribution |
| Clawback | Excess Incentive Compensation Recovery Policy (recoupment for restatements over last 3 completed fiscal years) |
| Hedging/pledging | Prohibited; all exec transactions pre-cleared (CFO pre-clearance by another executive) |
| Excise tax gross-ups | None (company policy) |
Severance and Change-of-Control (CIC) Economics
Summary of contractual protections (double-trigger in CIC window):
| Scenario | Cash severance | Bonus treatment | Equity | Benefits/Other |
|---|---|---|---|---|
| Termination without Cause or resignation for Good Reason (not in CIC window) | Lump sum = 1× current base salary | Accrued but unpaid prior-year bonus; no pro-rata current-year bonus specified for CFO | Unvested RSAs fully vest; if any PSUs outstanding, vest at target | Company-paid portion of COBRA for 12 months (after-tax reimbursement) |
| Termination without Cause or resignation for Good Reason within 3 months before or 24 months after a CIC (double trigger) | Lump sum = 1.5× (current base salary + average of prior two years’ bonuses; if <2 years, current target bonus) | Accrued but unpaid prior-year bonus (and plan-level pro-rata at target per company summary for CIC) | Unvested RSAs fully vest; if any PSUs outstanding, vest at target | Company-paid portion of COBRA for 18 months; up to $10,000 outplacement (1 year) |
Modeled potential payments (as of June 29, 2025):
| Scenario | Cash Severance | Bonus Severance | Equity Acceleration | Other Benefits | Total |
|---|---|---|---|---|---|
| Death or Disability | — | $564,000 | $316,755 | — | $880,755 |
| Termination without Cause or resignation for Good Reason (non-CIC) | $470,000 | $564,000 | $316,755 | $31,963 | $1,382,718 |
| Termination without Cause or resignation for Good Reason in connection with CIC | $705,000 | $987,000 | $316,755 | $57,944 | $2,066,699 |
Compensation Structure Analysis
- Shift to objective pay-for-performance: For FY2025 the STIP moved to 100% financial metrics (EBITDA and cash from operations) with equal weighting and no discretionary/individual components, tightening alignment to near-term operating results .
- LTI mix evolution: Company introduced PSU design for CEO in FY2025 (50/50 RSAs/PSUs), with intent to extend to key executives (including CFO eligibility beginning FY2026), increasing at-risk, performance-based equity versus historical time-based RSAs only .
- No options; anti-hedging/pledging and clawback in place: reduces risk of misalignment or leveraged personal hedging; no CIC excise tax gross-ups .
Performance Compensation – Detailed Metric Table (FY2025 STIP)
| Metric | Weight | FY2025 Target | FY2025 Actual | Payout |
|---|---|---|---|---|
| EBITDA ($M) | 50% | $22.9 | $41.6 | 200% |
| Cash Flow from Operations ($M) | 50% | $51.7 | $71.6 | 200% |
Equity Ownership & Alignment – Detail
| Component | Amount |
|---|---|
| Beneficial ownership (Aug 15, 2025) | 5,191 shares (0.1% of 4,160,284 shares outstanding); all unvested RSAs |
| FY-end unvested RSA value | $316,755 (5,191 × $61.02 on 6/27/25) |
| Ownership guidelines | Other NEOs: 2× base salary; must retain net vested shares until compliant |
| Hedging/margin/pledging | Prohibited by policy |
Employment Terms – Key Dates and Vesting
| Item | Detail |
|---|---|
| Employment start | Nov 13, 2024 |
| RSA new-hire grant | 5,191 RSAs on Nov 13, 2024; vests 1/3 each anniversary in 2025, 2026, 2027 |
| Grant-date fair value | $212,520 (sole FY2025 equity award) |
Performance & Track Record Indicators
| Indicator | FY2025 |
|---|---|
| TSR (value of initial $100) | $184.91 |
| Net income | $18.685M |
| EBITDA margin | 6.6% (year 1 of FY25–27 PSU framework) |
| Net sales YoY | +5.1% |
| FY2025 closing share price | $61.02; 52-week high/low $61.02 / $22.65 |
Investment Implications
- Strong pay-performance linkage near term; retention moderate: CFO’s cash incentive is now fully tied to EBITDA and cash generation and paid out at the plan’s 200% cap for FY2025 on outperformance, while equity exposure is currently limited to a time-vested new-hire RSA that begins vesting November 2025; regular performance-based LTI eligibility commences FY2026, which should further align long-term incentives .
- Limited near-term selling pressure but a vest catalyst exists: First RSA tranche vested on Nov 13, 2025; however, executives must retain net vested shares until they meet ownership guidelines and are prohibited from hedging/pledging, mitigating immediate sell pressure signals .
- Change-in-control economics are moderate: Double-trigger 1.5× (base + average/target bonus) plus COBRA and equity vest at target in a CIC termination; no excise tax gross-ups, indicating shareholder-favorable terms versus small-cap peers .
- Execution focus: Biography and appointment narrative emphasize operational finance, forecasting discipline, working capital, and data/IT rigor; FY2025 outperformance on EBITDA and cash flow, alongside improved margins and TSR, supports early evidence of execution under the refreshed leadership team .