Patrick O'Donnell
TreeHouse FoodsAbout Patrick O'Donnell
Patrick M. O’Donnell is Executive Vice President and Chief Financial Officer of TreeHouse Foods (THS). He was appointed permanent CFO on April 26, 2023 after serving as Interim CFO since June 30, 2022; he joined TreeHouse in July 2017 and holds a Bachelor’s degree in Accounting from Marquette University. Age: 46. Prior to TreeHouse he spent 14+ years at PricewaterhouseCoopers in progressively senior roles. TreeHouse’s 2024 performance context under his finance leadership: net sales were $3,354.0M (down 2.3% YoY), adjusted EBITDA $337.4M (down 7.8% YoY), cash from operations $265.8M, and free cash flow $126.1M; the STIP paid 0% for 2024 and the 2022 PSU cycle paid 57.8%, reflecting pay-for-performance alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| TreeHouse Foods | Assistant Corporate Controller | 2017–2019 | Finance leadership in accounting controls |
| TreeHouse Foods | Head of Corporate FP&A | 2019–2020 | Led corporate planning and analysis |
| TreeHouse Foods | Vice President & Corporate Controller | 2020–2022 | Corporate accounting oversight |
| TreeHouse Foods | Chief Accounting Officer | 2022–2023 | Principal accounting officer; interim CFO support |
| TreeHouse Foods | Interim CFO | Jun 30, 2022–Apr 26, 2023 | Recognized for contributions to growth strategy |
| TreeHouse Foods | EVP & CFO | Apr 26, 2023–present | Permanent CFO appointment |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PricewaterhouseCoopers | Various finance/audit roles | ~14+ years | Built finance and accounting expertise |
Fixed Compensation
Multi-year compensation and target incentive positioning.
| Year | Salary ($) | Target Bonus (% of Base) | Actual STIP/Bonus Paid ($) | Perquisite Allowance ($) | 401(k) Company Contributions ($) | Life Insurance ($) | Executive Physical ($) | All Other Compensation Total ($) |
|---|---|---|---|---|---|---|---|---|
| 2022 | 347,719 | N/A | 127,201 | — | — | — | — | 16,261 |
| 2023 | 496,667 | 75% (CFO appointment terms) | 276,139 | — | — | — | — | 27,743 |
| 2024 | 577,708 | 75% | — (0% payout) | 10,000 | 17,250 | 1,089 | 4,770 | 33,109 |
Additional salary and target settings:
- Base salary as of Dec 31, 2024: $585,000 (6.4% increase from $550,000) .
- 2024 target total annual compensation: Base $585,000; STIP 75% of base; Target LTI $1,170,000; Total $2,193,750 .
Performance Compensation
2024 Short-Term Incentive Plan (STIP) – Company Metrics and Outcomes
Adjusted EBITDA acted as a gating metric. The Compensation Committee exercised negative discretion; overall payout was 0% .
| Metric | Weight | Threshold | Target | Maximum | Fiscal 2024 Result | Payout |
|---|---|---|---|---|---|---|
| Net Sales Growth ($M) | Not disclosed (EBITDA weight reduced to 30%) | 3,433 | 3,536 | 3,657 | 3,377 | —% (gated) |
| Adjusted EBITDA ($M) | Not disclosed (gate) | 333 | 380 | 405 | 337 | —% (gated) |
| Gross Margin ($M) | Not disclosed | 588 | 670 | 710 | 593 | —% (gated) |
| Engagement Score (pts) | Not disclosed | Prior+1 | Prior+2 | Prior+3 | +3 | —% (gated) |
STIP design notes:
- 2024 change: Reduced adjusted EBITDA weighting from 55% to 30% to emphasize GAAP metrics .
- Vesting: Cash, annual; payout 0% for 2024 .
Long-Term Incentive Plan (LTIP) – 2024 Grants and PSU Design
O’Donnell’s 2024 LTI target: $1,170,000 (200% of base); split 50% RSUs and 50% PSUs. PSU components: ROIC (37.5%), Total Organic Revenue Growth (37.5%), r-TSR (25%) relative to Russell 3000 Packaged Foods & Meats; three-year cumulative measurement; 0–200% payout range .
| Component | Weight | Target Value ($) | Measurement | Status as of Dec 31, 2024 |
|---|---|---|---|---|
| RSUs | 50% | 585,000 | 1/3 vest annually over 3 years | Unvested shares outstanding below |
| PSU – ROIC | 37.5% of PSUs | 219,375 | 3-year cumulative (FY2024–2026) | Above threshold; Target level reported |
| PSU – Total Organic Revenue Growth | 37.5% of PSUs | 219,375 | 3-year cumulative (FY2024–2026) | At target; Max level reported |
| PSU – r-TSR | 25% of PSUs | 146,250 | 3-year cumulative (FY2024–2026) | Below threshold; Threshold level reported |
Grant specifics (2024 awards):
- RSU shares granted: 15,922 (grant date fair value $584,974) .
- 2024 PSUs (target): 6,468 units (grant date fair value $588,238) .
Prior LTIP cycles:
- 2023 PSU (FY2023–2025 tranche earned in 2024): target 496 units; 2024 ONI achieved 75.1% of target (0% payout banked) and Cash Flow Pre-Financing 82.3% (55.6% payout banked), overall below target .
- 2022 PSU cycle (FY2022–2024): overall payout certified at 57.8% for eligible NEOs; O’Donnell did not receive a 2022 PSU annual grant (appointed CFO in 2023) .
Equity Ownership & Alignment
Beneficial Ownership and Outstanding Equity (as of Feb 25, 2025 / Dec 31, 2024)
| Item | Amount |
|---|---|
| Common stock beneficially owned (excl. options) | 18,169 shares |
| Options currently exercisable (incl. within 60 days) | 3,395 shares |
| Total beneficial ownership | 21,564 shares |
| Shares outstanding | 50,203,511 |
| Ownership % (computed) | ~0.043% (21,564 ÷ 50,203,511) |
Outstanding equity awards at FY2024 year-end:
- Options:
- 6/3/2022 grant: 2,885 exercisable / 5,769 unexercisable; strike $42.69; expiration 6/3/2032 .
- 9/29/2017 grant: 510 exercisable; strike $67.73; expiration 9/29/2027 .
- Unvested RSUs: 16,059 shares; market value $564,153 (at $35.13 close) .
- Unearned PSUs in progress: 19,903 units; market value $699,192 .
- PSUs deemed earned but unvested (as of 12/31/2024):
- 2023 tranche: 205 units ($7,202) .
- 2024 tranche: 137 units ($4,813) .
- 2024 stock vested: 3,581 shares; value realized $136,519 .
Alignment and risk controls:
- Executive stock ownership guidelines: EVPs required to hold 3× base salary; all NEOs met or are within five-year window and on track .
- Hedging/pledging: Company prohibits hedging and pledging of Company stock; also prohibits holding stock in margin accounts .
Employment Terms
Severance and Change-in-Control Economics (Executive Severance Plan)
- Involuntary termination without cause or resignation for good reason: Base salary + target bonus; welfare benefits up to one year .
- Termination within 24 months following a change-in-control (double trigger): 2× base salary + target bonus; welfare benefits for two years .
- No excise tax gross-ups; “best net” provision may apply; double-trigger equity treatment under plan .
Quantification (assuming event on Dec 31, 2024; stock $35.13):
| Scenario | Severance ($) | RSUs ($) | PSUs ($) | Welfare Benefits ($) | Total ($) |
|---|---|---|---|---|---|
| Involuntary term (no CIC) | 1,023,750 | — | 116,878 | 25,491 | 1,166,119 |
| Disability/Death | — | 204,491 | 116,878 | — | 321,369 |
| Involuntary term following CIC | 2,047,500 | 671,967 | 610,487 | 50,982 | 3,380,936 |
| CIC without termination (awards not assumed) | — | 671,967 | 610,487 | — | 1,282,454 |
Other terms and policies:
- Non-solicit provisions under Executive Severance Plan; “Good Reason” includes compensation reduction >10% applicable to all executives or relocation; post-CIC good reason includes material reduction in duties .
- Clawback: Dodd-Frank compliant policy (NYSE Rule 10D-1) to recover excess incentive pay after restatements; discretionary recovery for misconduct (fraud, material policy breaches, failure to report) .
Perquisites (2024):
- Perquisite allowance $10,000; 401(k) company contributions $17,250; life insurance $1,089; executive physical reimbursement $4,770; total other compensation $33,109 .
Performance & Track Record
- Company 2024 performance: net sales $3,354.0M (vs $3,431.6M in 2023), adjusted EBITDA $337.4M (vs $365.9M), cash from operations $265.8M (vs $157.3M), free cash flow $126.1M (vs $16.5M) .
- Pay-for-performance outcomes: 2024 STIP paid 0%; 2022 PSU cycle earned 57.8%; 2023 PSU components earned below target in 2024 .
- Say-on-Pay approval improved to ~96% in 2024, reflecting investor support after program changes (more GAAP metrics; PSU redesign) .
Equity Ownership & Alignment (Detailed)
| Element | Policy / Status |
|---|---|
| Ownership guideline | EVP at 3× base salary; compliance met or on track within five years |
| Hedging/pledging | Prohibited for directors, officers, employees |
| Option overhang | 2017 and 2022 options outstanding; strikes $67.73 and $42.69, respectively (underwater vs 12/31/2024 close $35.13) |
| Vested vs unvested | Unvested RSUs and PSUs detailed above; 2024 vesting realized $136,519 on 3,581 shares |
Compensation Structure Analysis
- Shift toward performance equity: 50% of LTI in PSUs, now tied to ROIC and organic revenue over a 3-year period; r-TSR retained but capped if negative TSR .
- Increased GAAP focus: Reduced EBITDA weight in STIP from 55% to 30% in 2024 after investor feedback .
- No tax gross-ups, no single-trigger CIC, clawback strengthened; anti-hedging/pledging policies in place .
Related Party Transactions and Red Flags
- No related person transactions reportable since Jan 1, 2024; robust conflict-of-interest procedures .
- No hedging or pledging permitted; no option repricing without shareholder approval; no guaranteed bonuses .
Compensation Peer Group (Benchmarking Context)
TreeHouse benchmarks against packaged foods and similar consumer staples peers; 2024 peer group includes companies such as Conagra Brands, Post Holdings, J.M. Smucker, Lamb Weston, and others; TreeHouse positioned at 42nd percentile for revenue and 27th percentile for TEV within peers at the time of review .
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay approval ~96%; program adjustments included GAAP emphasis in STIP and PSU redesign (ROIC, organic revenue; cumulative 3-year goals) following engagement with investors representing ~85% of shares .
Investment Implications
- Pay-for-performance is strict: 0% STIP payout for 2024 and sub-target PSU outcomes reduce cash realizations, aligning incentives with operational and cash flow execution; expect limited near-term insider selling pressure given underwater options and hedging/pledging prohibitions .
- Retention risk mitigated by equity-heavy LTI and double-trigger CIC severance; ownership guidelines and RSU/PSU overhang encourage continued alignment but may create periodic sell windows at vesting; monitor 2024–2026 PSU metrics (ROIC and organic revenue trend vs targets) as leading indicators of future payouts .
- Governance quality signals are favorable (no gross-ups, strong clawback, anti-hedging/pledging, investor-supported program changes), reducing compensation-related controversy risk; however, continued operational execution is required to hit rigorous targets and drive PSU realizations and TSR .