Bruce Thames
About Bruce Thames
Bruce Thames, 62, is President & CEO of Thermon Group Holdings (THR) and has served as a director since April 1, 2016; he joined Thermon in April 2015 as EVP & COO and became CEO and director on April 1, 2016 . He holds a B.S. in Mechanical Engineering from The University of Texas at Austin . Under his leadership in Fiscal 2025 (year ended Mar 31, 2025), Thermon delivered revenue of $498 million (+1% YoY), net income of $53.5 million (+4% YoY), GAAP EPS of $1.57 (+4% YoY), and Adjusted EBITDA of $109.2 million (+5% YoY) . TSR on the FY23 RTSR PSU cohort measured over June 1, 2022–Mar 31, 2025 was 91.9% and at the 90th percentile relative to peers (payout at 200% of target) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Thermon Group Holdings | EVP & COO | 2015–2016 | Transition leadership prior to CEO appointment; operations and lean six sigma expertise |
| TD Williamson | SVP & COO (2012–2015); VP & GM Eastern Hemisphere (2010–2012); VP North America (from 2005) | 2005–2015 | Global operating leadership in pipeline solutions; international expansion |
| GE Energy (Dresser Flow Solutions) | Director, North American Operations and Product Director (Ball Valves) | 2002–2005 | Product and operations leadership in valve group |
| Cooper Industries (formerly Intool) | Product engineering, marketing, operations roles | ~12 years | Product innovation and operations foundation |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No other public company directorships disclosed |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Salary ($) | 665,014 | 689,990 | 715,035 |
| Year-end Base Salary ($) | — | 696,800 as of 3/31/24 | 721,180 as of 3/31/25 |
| Target Annual Bonus (% of Base) | 100% | 100% | 100% |
| Actual Annual Bonus Paid ($, STIP) | 1,197,025 | 548,873 | 543,620 |
Notes:
- FY25 STIP was funded on Revenue (30% weight), Adjusted EBITDA (60%), and ESG (10%); actual corporate payout factor was ~76% of target (Revenue 16.6%, EBITDA 39.4%, ESG 20.0%) .
Performance Compensation
LTIP Design and FY25 Targets
| Element | FY25 Target Mix | Metrics/Design |
|---|---|---|
| RSUs | 35% of LTIP grant value | Time-vested in 3 annual installments |
| PSUs (EBITDA) | 35% | 3 one‑year Adjusted EBITDA goals; earned each year but vest at end of 3‑yr period; 0–200% tranche payout |
| PSUs (ROIC) | 30% | 3 one‑year ROIC goals; earned each year but vest at end of 3‑yr period; 0–200% tranche payout; threshold set at WACC for yr 1 |
| FY25 CEO LTIP Target Value | YoY Change | RSU Grant (shares) | EBITDA PSU Target (shares) | ROIC PSU Target (shares) |
|---|---|---|---|---|
| $1,300,000 | — | 13,477 (granted 6/1/24) | 13,477 (granted 6/1/24) | 11,552 (granted 6/1/24) |
Grant-date fair values for FY25 CEO equity: RSUs $454,984; EBITDA PSUs $454,984; ROIC PSUs $389,996 .
Incentive Outcomes (Most Recent Periods)
| Plan/Cohort | Performance Period | Target Shares (for period) | Outcome | Payout |
|---|---|---|---|---|
| FY25 EBITDA PSUs (Yr 1 of 3 across multiple cohorts) | Apr 1, 2024–Mar 31, 2025 | Examples: 4,492 (FY25 grant yr1); 6,672 (FY24 grant yr2); 9,848 (FY23 grant yr3) for CEO | Adjusted EBITDA $108.9m vs $116.4m target | 83.8% of each 1/3 tranche |
| FY25 ROIC PSUs (Yr 1 of FY25 grant; Yr 2 of FY24 grant) | Apr 1, 2024–Mar 31, 2025 | Examples: 3,850 (FY25 grant yr1); 5,719 (FY24 grant yr2) for CEO | ROIC 10.7% vs 11.19% target | 90.8% of each 1/3 tranche |
| FY23 EBITDA PSUs (3‑yr cumulative) | Apr 1, 2022–Mar 31, 2025 | 29,545 cumulative target shares (CEO) | Average of banked periods (200.0%, 82.2%, 83.8%) | 122.0% (36,051 shares earned) |
| FY23 RTSR PSUs | Jun 1, 2022–Mar 31, 2025 | 25,324 target shares (CEO) | TSR 91.9%; 90th percentile relative performance | 200% (50,648 shares) |
Equity Ownership & Alignment
| Beneficial Ownership (as of Record Date Jun 6, 2025) | Shares | % Outstanding | Notes |
|---|---|---|---|
| Bruce Thames | 325,352 [includes 32,472 options exercisable within 60 days] | 1.0% | Based on 33,243,095 shares outstanding |
| Outstanding Equity (3/31/2025) | Count | Value ($) |
|---|---|---|
| Stock Options (exercisable; 6/1/2020 grant @ $14.28; exp. 6/1/2030) | 32,472 | — |
| Unvested RSUs | 36,671 | 1,021,287 (at $27.85) |
| Unearned PSUs (at target) | 62,203 | 1,732,354 (at $27.85) |
Additional alignment and policies:
- CEO stock ownership guideline = 5x base salary; NEOs either in compliance or within time to comply as of Record Date .
- Anti‑hedging and anti‑pledging policy prohibits hedging and pledging; annual certifications required .
- No additional director pay for Mr. Thames; CEO receives no separate board compensation .
Employment Terms
| Scenario (as of 3/31/2025) | Cash Severance Multiple | Severance Period (months) | Bonus Treatment | COBRA Lump Sum | Equity Treatment | Estimated CEO Total ($) |
|---|---|---|---|---|---|---|
| Termination by Co. w/o Cause or Good Reason (non‑CIC) | 1.5x base salary | 18 | Pro‑rated FY bonus | $41,555 | RSUs pro‑rata vesting; PSUs pro‑rata earned per plan | 3,782,197 |
| CIC + Qualifying Termination (Double Trigger) | 2.5x (base + annual bonus) [CEO] | 30 | Pro‑rated FY bonus | $69,258 | 100% vesting; PSUs ≥ target or actual to date; unassumed awards may vest at CIC | 7,128,471 |
Plan features and governance:
- No employment contracts; no single‑trigger cash severance; no tax gross‑ups on termination benefits; clawback policy compliant with Dodd‑Frank .
Board Governance
- Role: Director, President & CEO; not independent due to employment .
- Board leadership: Independent Chairman (John Clarke since Nov 2023); Chair/CEO roles separated .
- Committees: All standing committees (Audit; Human Capital Management & Compensation; Finance; Nominating & Corporate Governance) comprised solely of independent directors; Mr. Thames is not a member of any committee .
- Meeting attendance: Board met 7 times in Fiscal 2025; each director attended ≥75% of meetings; all directors attended 2024 annual meeting .
Director Compensation (Context)
- Non‑executive director annual cash retainer $70,000 and equity retainer $95,000 (granted quarterly; 100% vested at grant) in Fiscal 2025; CEO receives no additional compensation for board service .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay support: 97% approval at 2024 Annual Meeting; no program changes made for Fiscal 2025 in response .
Compensation Peer Group & Positioning
- Fiscal 2025 peer group includes companies such as Allient, Aspen Aerogels, CECO Environmental, CTS, DMC Global, Dril‑Quip, Gorman‑Rupp, Matrix Service, Mistras, NCS Multistage, Orion Energy, Powell Industries, Preformed Line Products, Vishay Precision, among others .
- Committee uses peers and surveys to inform, but does not target a specific percentile; considers role scope, tenure, and retention needs .
Performance & Track Record (select highlights)
| Metric | FY 2025 Result |
|---|---|
| Revenue | $498 million (+1% YoY) |
| Net Income | $53.5 million (+4% YoY) |
| GAAP EPS | $1.57 (+4% YoY) |
| Adjusted EBITDA | $109.2 million (+5% YoY) |
| Capital Allocation | Repurchased $20 million of shares; repaid $28.6 million of debt |
| Strategic Mix | 72% of sales in non‑oil & gas end‑markets |
| TSR (FY23 RTSR PSU period) | 91.9%; 90th percentile; 200% payout |
Compensation Structure Analysis
- Mix and leverage: Variable compensation represents ~74% of CEO target total direct compensation, emphasizing pay‑for‑performance .
- Annual incentives: FY25 STIP at ~76% of target reflects revenue and EBITDA below targets offset by maximum ESG achievement—good line of sight and balanced scorecard .
- Long‑term incentives: Shifted to performance‑heavy LTIP (65% PSUs across EBITDA and ROIC), with rigorous yearly targets and 3‑year vesting—aligns with profitability and capital efficiency .
- Realized outcomes: Above‑target PSU vesting on FY23 EBITDA (122%) and RTSR (200%) demonstrates the plan’s upside when performance exceeds peers/targets; FY25 tranche outcomes (EBITDA 83.8%, ROIC 90.8%) scale down appropriately when below targets .
- Governance: No single‑trigger cash severance; clawback in place; anti‑hedging/pledging; robust ownership guidelines (CEO 5x salary) .
Vesting Schedules and Potential Insider Selling Pressure
- RSUs vest in three equal annual installments (time‑based) .
- PSUs are measured over three one‑year periods but vest at the end of the full three‑year period, maintaining longer‑term alignment .
- CEO holds 32,472 fully exercisable options at a $14.28 strike (exp. 6/1/2030), implying in‑the‑money value at typical trading levels; unvested equity (RSUs $1.02m; PSUs $1.73m at $27.85) creates retention value and reduces near‑term selling pressure .
- Hedging and pledging of company securities are prohibited, limiting financial engineering and leverage risks tied to insider stock .
Employment Terms (Retention Risk, Change‑of‑Control Economics)
- Severance Plan: CEO receives 1.5x base salary (18 months) on a qualifying termination; 2.5x base+bonus (30 months) upon a double‑trigger CIC; pro‑rated bonus and COBRA lump sums apply; equity subject to pro‑rata/acceleration per plan .
- Estimated values at 3/31/25: $3.78m (non‑CIC) and $7.13m (CIC double trigger), including equity acceleration assumptions (target or actual for PSUs) .
- No employment contract and no tax gross‑ups on termination benefits; clawback policy in effect .
Board Service, Committee Roles, and Dual‑Role Implications
- Director since 2016; non‑independent executive director (CEO) .
- No committee memberships; all standing committees are fully independent (limits potential conflicts) .
- Independent Board Chair structure since Nov 2023 supports independent oversight and mitigates dual‑role concerns .
- Attendance: Board met 7x; all directors, including CEO, met ≥75% participation .
Investment Implications
- Alignment and incentives: High at‑risk mix (~74% variable) with performance‑weighted PSUs (EBITDA, ROIC) promotes operational profitability and capital discipline; robust policy set (ownership guidelines, no hedging/pledging, clawback) strengthens alignment with shareholders .
- Retention/selling dynamics: Significant unvested equity (target PSUs and RSUs) plus three‑year PSU vesting cadence create meaningful “golden handcuffs”; anti‑pledging and ownership rules reduce forced‑sale risk .
- Performance track record: FY25 growth in net income/EBITDA and strong multi‑year TSR recognition (RTSR 200% payout) support the pay‑for‑performance narrative; however, FY25 missed revenue/EBITDA targets curtailed annual bonus to ~76%—the plan scales pay down appropriately .
- Change‑of‑control overhang: Double‑trigger multiple (2.5x base+bonus) and equity acceleration (at least target) are within small/mid‑cap norms but could raise CIC transaction costs; investors should incorporate ~$7.1m estimated CEO cost at FY25 marks into scenario analyses .
- Governance sentiment: 97% Say‑on‑Pay approval and independent Chair/committee structure indicate low governance friction and limited pay controversy risk near term .