Paul Manning
SENSIENT TECHNOLOGIESAbout Paul Manning
Paul Manning, age 50, is Chairman, President, and Chief Executive Officer of Sensient Technologies, serving as CEO since 2016 and a director since 2012; he holds a B.S. in Chemistry from Stanford and an MBA from Northwestern, and served four years as a U.S. Navy Surface Warfare Officer . Under his leadership, 2024 performance-driven incentive metrics were exceeded, with corporate adjusted EBITDA up 8.3% and local currency revenue up 7.4%, driving maximum annual incentive payouts; total shareholder return for the 2020–2024 window was 121 at year-end 2024 versus 109 in 2023 (base 100 in 2019), indicating favorable momentum aligned with pay-versus-performance . The Board combines the CEO and Chairman roles with a Lead Independent Director to strengthen governance; Paul is classified as non-independent, and director independence, executive sessions, and committee oversight are emphasized to offset dual-role risks .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sensient Technologies | Chairman, President & CEO | 2016–present | Set strategy; upgraded sales force and GM talent; led Board; directed R&D priorities |
| Sensient Technologies | President & CEO | 2014–2016 | Executive leadership during transition to current role |
| Sensient Technologies | President & COO | 2012–2014 | Operational leadership; execution on growth programs |
| Sensient Technologies | President, Color Group | 2010–2012 | Led Color Group; product and portfolio execution |
| Sensient Technologies | GM, Food Colors North America | 2009–2010 | Regional GM; commercial and operations management |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Danaher (Fluke Division) | M&A Integration Manager | Not disclosed | Integration execution; operational synergies |
| McMaster-Carr | Supply chain and project manager roles | Not disclosed | Supply chain optimization; project delivery |
| U.S. Navy | Surface Warfare Officer | Four years | Leadership under high-stakes operations; discipline and execution |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,040,000 | 1,080,000 | 1,080,000 |
| Target Bonus (% of Salary) | 100% | 100% | 100% |
| Actual Annual Cash Incentive ($) | 2,080,000 | 91,277 | 2,160,000 |
| Stock Awards – Grant-Date Fair Value ($) | 4,300,068 | 4,300,041 | 4,500,004 |
| All Other Compensation ($) | 177,831 | 198,834 | 106,043 |
| Total Compensation ($) | 7,597,899 | 6,174,152 | 7,846,047 |
Notes:
- CEO target bonus is 100% of base salary at target performance; payouts are capped at 200% based on plan design .
Performance Compensation
Annual Cash Incentive (2024 results; paid Feb 13, 2025)
| Metric | Weight | Target Structure | Actual (2024) | Payout (% of Target) | Payment Timing |
|---|---|---|---|---|---|
| Adjusted EBITDA | 70% | 3 bands: min (−4.6% YoY)→0%; target (+6%)→100%; max (+8%)→200% | $268.6M; +8.3% YoY | 200% | Approved Feb 13, 2025 |
| Local Currency Revenue | 30% | 3 bands: min (−5.5% YoY)→0%; target (+5%)→100%; max (+6.5%)→200% | $1.6B; +7.4% YoY | 200% | Approved Feb 13, 2025 |
Plan design exclusions: Portfolio Optimization Plan costs and FX were excluded; Adjusted EBITDA also excludes non-cash equity comp per plan definitions .
PSUs – Realized (2021 grant, performance period 2022–2024)
| Metric | Weight | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Adjusted EBITDA CAGR | 70% | 3% CAGR→100%; 8%→200%; <−3%→0% | +5.3% CAGR | Contributes to overall 102.2% | Feb 2025 (post 12/31/2024 period) |
| Adjusted ROIC change | 30% | No change→100%; +50 bps→200%; −75 bps or worse→0% | −140 bps | Contributes to overall 102.2% | Feb 2025 (post 12/31/2024 period) |
| Overall PSU Payout | — | — | — | 102.2% of target | Feb 2025 |
PSUs – New Targets (2024 grant, performance period 2025–2027)
| Metric | Weight | Baseline | Target | Max | Vesting |
|---|---|---|---|---|---|
| Adjusted EBITDA CAGR | 70% | 2024 EBITDA $268.6M | +3% CAGR (100%) | +8% CAGR (200%) | End of 3-year period |
| Adjusted ROIC change | 30% | 2024 ROIC 9.0% | +25 bps (100%) | +50 bps (200%) | End of 3-year period |
Restricted Stock: 3-year cliff vest; retirement/death/disability provisions and potential acceleration on change of control per plan .
Vesting Events: In 2024, Paul acquired 36,005 shares upon vesting of prior equity awards, realizing $2,448,700; these values include dividends and are not reduced for tax withholdings .
Equity Ownership & Alignment
- Beneficial ownership: 256,938 shares; plus 112,094 PSUs outstanding (unvested), not counted in beneficial ownership; all directors and officers as a group own 1.2% of outstanding shares; no individual owns ≥1% . Shares outstanding were 42,437,618 on Feb 27, 2025; Paul’s beneficial ownership is less than 1% per company disclosure .
- Stock ownership policy: CEO must hold at least 6x salary; hedging, short sales, and pledging are prohibited for officers and directors; all NEOs and directors comply .
- Award mix: Sensient shifted LT equity mix from 100% PSUs (2014–2019) to 60% PSUs and 40% restricted stock starting 2020 to strengthen retention while maintaining performance alignment .
Equity grant and outstanding detail:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| PSUs Granted (#) | 35,160 | 42,442 | 34,492 |
| Restricted Stock Granted (#) | 23,440 | 28,294 | 22,994 |
| Stock Awards – Grant-Date Fair Value ($) | 4,300,068 | 4,300,041 | 4,500,004 |
Outstanding at 12/31/2024 (market price $71.26):
| Metric | Number | Market Value ($) |
|---|---|---|
| Unvested Restricted Stock (#) | 23,440 (2022); 28,294 (2023); 22,994 (2024) | 1,670,334; 2,016,230; 1,638,552 |
| Unvested PSUs (#) | 35,160 (2022); 42,442 (2023); 34,492 (2024) | 2,505,502; 3,024,417; 2,457,900 |
| 2021 PSUs (vest status) | 26,084 target; vested at 102.2% | 1,858,746 (target value at $71.26) |
Options: No stock options granted or outstanding; repricing prohibited by plan .
Insider selling pressure mitigants:
- Prohibitions on hedging and pledging, plus “hold-to-retirement” policies for directors; officer ownership guidelines increase retained ownership over time .
- PSU and RS three-year schedules create periodic vesting events; performance payout in early 2025 from the 2021 PSU cycle suggests potential supply from tax withholdings upon settlement, though the company withholds for taxes and reports value realized separately .
Employment Terms
| Term | Details |
|---|---|
| Employment Agreement | Effective Feb 13, 2020; initial 3-year term with automatic 1-year renewals unless either party gives ≥12 months’ notice; includes salary, bonus eligibility, participation in incentive/retirement plans, and customary benefits . |
| Non-Compete | 1-year post-CEO service non-compete incorporated by reference . |
| Termination (without cause / for good reason) | Severance equals 3×(base salary + highest annual bonus among last five years or since age 50), plus up to 3 years of benefits and SERP/service credits; illustrative total $21,794,211 at 12/31/2024 (including $9,480,000 severance; $498,772 benefits; $11,815,439 SERP) . |
| Change-of-Control (double-trigger) | Agreements for all executive officers; upon CoC plus qualifying termination within 36 months, 3× salary+bonus, benefits for 3 years, and accelerated vesting of equity (PSUs vest at target upon CoC). Illustrative CEO total $37,439,893 at 12/31/2024; no tax gross-ups . |
| Clawback | NYSE-compliant clawback adopted in 2023 for recovery of erroneously awarded incentive compensation upon material accounting restatements . |
| Insider Trading Policy | Filed as Exhibit 19 to 2024 10-K; company-wide policy governing transactions by insiders . |
| SERP | Present value $6,660,000 at year-end 2024 (not yet vested at year-end); SERP frozen for CEO after 2015; plan provides survivor benefit and change-of-control lump sum distributions via Rabbi Trust B . |
| Deferred Compensation (nonqualified) | Aggregate balance $980,638; 2024 registrant contribution $141,500; earnings $30,440 (not above-market) . |
Board Service, Committees, and Dual-Role Implications
- Board service: Director since 2012; current committee roles include Executive Committee Chair, Finance Committee member, and Scientific Advisory Committee member .
- Independence: Paul Manning is not independent under NYSE/SEC rules; eight of ten directors are independent; Ms. Whitelaw is not conclusively independent due to exceptional tenure .
- Dual role: CEO and Chairman combined; governance mitigants include a Lead Independent Director (Dr. Carleone), strong committee system, and executive sessions of independent directors (four in 2024) .
- Attendance: Board met six times in 2024; directors attended 100% of Board and committee meetings except one Executive Committee meeting missed by a different director .
Compensation Structure Analysis
- Mix and risk: Shift from 100% PSUs to 60% PSUs/40% RS beginning 2020 increased retention without reducing performance orientation; annual cash incentives emphasize Adjusted EBITDA (70%) over revenue (30%) to prioritize profitability .
- Pay-for-performance: 2024 corporate performance delivered maximum annual incentive payouts; 2021 PSU cycle paid near target (102.2%), demonstrating multi-year calibration and non-GAAP adjustments (Portfolio Optimization and FX) applied consistently .
- Governance and market alignment: Independent Compensation Committee, Willis Towers Watson as independent consultant, pay benchmarking against a 17-company peer set with Sensient ranking high on market cap and operating income; CEO pay ratio of ~114× in 2024; say-on-pay approval 92.6% in 2024 .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: 92.6% in favor; ongoing engagement with institutional shareholders and incorporation of feedback into plan design and peer group refresh .
Equity Awards & Director Compensation (Board context)
- Directors receive $91,600 cash retainer, restricted stock valued at $111,000 annually (as of 2025), plus committee retainers; directors must hold ≥75% of net shares until retirement; no options outstanding for directors; director plan vesting 1/3 annually over three years .
Risk Indicators & Red Flags
- Related party: CEO’s brother serves as General Counsel; employment arrangement vetted by Audit Committee; compensation set via standard processes .
- Dual role: Combined CEO/Chairman may raise independence concerns; Sensient cites research and mitigants (Lead Director, executive sessions) .
- Hedging/pledging: Prohibited; ownership guidelines enforced and met, reducing misalignment risks .
- Change-of-control economics: Large potential payouts and accelerated vesting on CoC; double-trigger structure and no tax gross-ups mitigate shareholder-unfriendly features .
Compensation Peer Group (Benchmarking)
| Peer Companies (2024 set) | |
|---|---|
| Ashland Inc.; Balchem; Ecovyst; Edgewell Personal Care; Hawkins; Ingevity; Innospec; Koppers; LSB Industries; Medifast; Minerals Technologies; Nu Skin; Mativ Holdings; Quaker Chemical; Rayonier Advanced Materials; Stepan; USANA Health Sciences |
Sensient rank: Market cap 83rd percentile; operating income 70th; revenue 35th among peers; base salaries anchored to ~50th percentile for roles .
Investment Implications
- Strong pay-for-performance linkage: Maximum 2024 cash incentive payouts driven by Adjusted EBITDA and revenue growth; multi-year PSUs paid near target, reinforcing disciplined performance calibration .
- Retention and alignment: CEO holds material equity with 3-year PSU/RS schedules, no hedging/pledging, and ≥6× salary ownership guideline; vesting events could create periodic supply, but policies favor long-term alignment .
- Governance mitigants vs dual-role risk: Combined CEO/Chairman is offset by Lead Director, majority-independent board, robust committee oversight, and executive sessions; independence concerns are acknowledged given non-independent CEO and one long-tenured director .
- Change-of-control asymmetry: Significant CoC payouts and equity acceleration could be a valuation overhang in M&A scenarios; double-trigger, no tax gross-ups, and Rabbi Trust structure provide clarity but magnify severance optics .
- Shareholder support: 92.6% say-on-pay approval suggests investor acceptance of compensation design and its pay-performance alignment, lowering governance-driven risk premia .