David Huml
TENNANTAbout David Huml
David W. Huml, age 56, is President and Chief Executive Officer of Tennant Company (TNC) and has served on the Board since 2021; he was appointed CEO on March 1, 2021 after serving as COO from April 2020 to March 2021 . Under Huml’s tenure, Tennant delivered record net sales and expanded Adjusted EBITDA in 2024 (net sales +3.5% YoY; Adjusted EBITDA $208.8M vs $192.9M in 2023), with a 98.7% of-target annual bonus payout, and achieved above-target long-term PRSU performance for the 2022–2024 cycle (123.8%) . Pay-for-performance alignment appears strong: realizable CEO pay sits below peer medians while 3-year TSR ranked ~67th percentile versus peers for the period ended 12/31/2023; the CEO pay ratio was 96:1 in 2024 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Tennant Company | President & CEO | 2021–present | Enterprise leadership driving growth strategy and record revenue/EBITDA |
| Tennant Company | Chief Operating Officer | 2020–2021 | Global operations oversight |
| Tennant Company | SVP EMEA, APAC, Global Marketing & Operations | 2018–2020 | International and global functional leadership |
| Tennant Company | SVP EMEA, APAC & Global Marketing | 2017–2018 | Regional and global marketing leadership |
| Tennant Company | SVP APAC & Global Marketing | 2016–2017 | APAC and global marketing leadership |
| Tennant Company | SVP Global Marketing | 2014–2017 | Global marketing leadership |
| Pentair plc | VP Marketing; VP Global Agriculture | 2009–2014 | Product/market roles in global water solutions |
| Hoffman; Graco Inc. | Sales and marketing positions | 1992–2009 | Commercial and marketing roles |
External Roles
| Category | Role(s) | Years | Notes |
|---|---|---|---|
| Public company boards | None | — | Proxy lists no current/past 5-year U.S. public boards for Huml |
| Other non-profit/private boards | Not disclosed | — | No disclosures in proxy |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 841,462 | 873,750 | 947,500 |
| Annualized Base Rate ($) | 855,000 | 880,000 | 970,000 (+10.2%) |
Notes:
- CEO CIP target remained at 100% of base salary; LTIP target increased from 310% to 315% in 2024 to align with market .
Performance Compensation
Annual Cash Incentive Plan (CIP) — 2024
| Performance Measure | Weight | Threshold | Target | Maximum | 2024 Actual | Payout vs Target |
|---|---|---|---|---|---|---|
| Adjusted EBITDA$ (in $000s) | 50% | 166,000 | 205,000 | 220,000 | 204,172 | 98.7% overall |
| Adjusted EBITDA% | 25% | 14.4% | 16.0% | 16.6% | 15.97% | 98.7% overall |
| Total Revenue (in $000s) | 25% | 1,154,000 | 1,282,000 | 1,353,000 | 1,278,565 | 98.7% overall |
CEO actual non-equity incentive (CIP) payout: $957,390 for 2024 .
Annual Cash Incentive Plan (CIP) — 2023
| Performance Measure | Weight | Threshold | Target | Maximum | 2023 Actual | Payout vs Target |
|---|---|---|---|---|---|---|
| Adjusted EBITDA$ (in $000s) | 50% | 125,000 | 152,000 | 158,000 | 192,900 | 200% overall |
| Adjusted EBITDA% | 25% | 12.0% | 13.4% | 13.9% | 15.5% | 200% overall |
| Total Revenue (in $000s) | 25% | 1,046,000 | 1,137,000 | 1,188,000 | 1,244,000 | 200% overall |
CEO actual non-equity incentive (CIP) payout: $1,760,000 for 2023 .
Long-Term Incentive Plan (LTIP) — PRSU Payouts
| Cycle | Metrics & Weighting | Threshold | Target | Max | Actual Payout |
|---|---|---|---|---|---|
| 2022–2024 | Incentive ROIC (60%), 3-yr Cumulative EPS (40%) | See plan | See plan | 200% | 123.8% |
| 2021–2023 | Incentive ROIC (60%), 3-yr Cumulative EPS (40%) | See plan | See plan | 200% | 128.9% |
LTIP Vehicle Mix
| Year | PRSUs | Restricted Stock | Stock Options |
|---|---|---|---|
| 2023 | 50% | 25% | 25% |
| 2024 | 50% | 50% | 0% |
| 2025 | PRSU metrics add Cumulative Revenue (34%), ROIC (33%), EPS (33%) | No mix change | — |
2024 Equity Grants (CEO)
| Grant Type | Grant Date | Shares/Units | Grant Date Fair Value ($) |
|---|---|---|---|
| PRSUs (target) | 2/27/2024 | 13,868 | 1,527,699 |
| Restricted Stock | 2/27/2024 | 13,868 | 1,527,699 |
| PRSUs (max) | 2/27/2024 | 27,736 | — |
Vesting: PRSUs vest based on 3-year performance (12/31/2026); restricted stock vests 100% on third anniversary; dividends on restricted stock accumulate and are paid in cash upon vesting; no dividend equivalents on PRSUs .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total beneficial ownership (CEO) | 156,935 shares; includes 97,071 shares covered by options exercisable within 60 days |
| Ownership as % of outstanding | Less than 1% (asterisk denotes <1% per proxy; 18,806,189 shares outstanding as of 3/6/2025) |
| Unvested restricted stock (as of 12/31/2024) | 8,411 (3/1/2022); 9,358 (2/28/2023); 13,868 (2/27/2024) |
| Unearned PRSUs (target, as of 12/31/2024) | 16,822 (2022); 18,716 (2023); 13,868 (2024) |
| Options exercisable (selected grants, CEO) | 14,056 @ $63.65 exp. 2/26/2029; 7,470 @ $82.29 exp. 2/25/2030; 3,197 @ $56.28 exp. 5/11/2030; 25,311 @ $78.24 exp. 3/02/2031; 18,838/9,419 @ $78.78 exp. 3/01/2032; 9,390/18,780 @ $72.88 exp. 2/28/2033 |
| Stock ownership guidelines | CEO: 5x base salary; must retain 50% of net shares from vest/exercise until in compliance; options/performance shares excluded from compliance calc since 2/1/2024 |
| Hedging/pledging | Prohibited for directors and officers (no hedging or pledging of company securities) |
| Clawback policies | Recovery of excess incentive compensation upon restatement; broader misconduct recovery for access persons |
Employment Terms
| Provision | Terms |
|---|---|
| Executive Employment Agreement (non-CIC) | If terminated without cause or resign for good reason: CEO receives 2 years’ base salary paid over 24 months (excess over 409A cap paid within ~2.5 months), pro-rata CIP at target based on actual results, and benefits continuation for up to 18 months |
| Management Agreement (change-in-control, double trigger) | If terminated without cause or resign for good reason within 3 years post-CIC: lump sum equal to 3x “annual compensation” (base + higher of target bonus or 3-year average payout), pro-rata CIP at target, plus 18 months of Company-paid portion of medical/dental/basic life premiums; benefits payable within ~2.5 months |
| Equity acceleration on CIC | Equity awards generally accelerate/lapse restrictions upon change-in-control |
| Restrictive covenants | 12-month non-compete and non-solicit; confidentiality obligations continue as long as information remains confidential |
| Severance plan (newer execs) | Executive Officer Severance Plan provides 2x annual compensation on CIC versus 3x in Management Agreements; other terms substantially similar; “net best” 280G cutback |
Board Governance
- Board role: Huml is a director since 2021; he is not on any Board committees .
- Independence structure: Independent Chair of the Board (Donal L. Mulligan) and all Board committees comprised of independent directors; executive sessions at beginning/end of regularly scheduled meetings; 100% meeting attendance in 2024 .
- Dual-role implications: CEO plus director, but not Chair; independent Executive Committee oversees CEO evaluation and succession planning, mitigating independence concerns .
Director Compensation
- Tennant’s director compensation program applies to non-employee directors (cash retainers plus annual RSU grants); Huml does not appear in the non-employee director compensation tables, indicating he does not receive separate director fees/equity for Board service as an employee director .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval |
|---|---|
| 2023 | ~97% of votes cast supported executive compensation |
| 2024 | ~95% of votes cast supported executive compensation |
Performance & Track Record
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Net Sales | $1,244,000,000 (+13.9% YoY; +13.6% organic) | $1,278,565,000 (+3.5% YoY; +3.2% organic) |
| Adjusted EBITDA ($) | $192,900,000 | $208,800,000 |
| Adjusted EBITDA margin | 15.5% | 15.97% |
| Realizable pay vs TSR peers (3-yr) | CEO ~28th percentile realizable pay vs peer TSR ~67th percentile (period ended 12/31/2023) | |
| CEO Pay Ratio | 96:1 (2024) |
Compensation Committee & Peer Group
- Committee composition: All independent directors; chaired by David Windley; meets ≥4 times per year; engages independent consultant Pearl Meyer, assessed free of conflicts .
- Comparator group: Industrial manufacturers and related firms reviewed annually with revenues and market caps aligned to Tennant’s profile; updates noted in 2023 (e.g., Helios Technologies added; Toro removed) .
Compensation Structure Analysis
- Shift in LTIP mix from options to 100% stock (50% PRSUs/50% restricted) in 2024 reduces risk and emphasizes retention, while maintaining performance leverage through ROIC/EPS metrics; in 2025 PRSUs add Cumulative Revenue, aligning incentives with growth priorities .
- Strong pay-for-performance outcomes: 2023 CIP paid at maximum amid record results; 2024 CIP near target in a normalization year; multi-year PRSU cycles paid above target, indicating achievement against ROIC/EPS objectives .
- Governance protections: Robust clawbacks, prohibitions on hedging/pledging, majority independent Board and committees, and ownership guidelines requiring 5x salary for CEO with mandatory retention until compliance .
Equity Grant and Vesting Schedules (CEO)
| Award Type | Vesting | Notes |
|---|---|---|
| Restricted Stock | 100% at 3rd anniversary; dividends accrue and paid in cash at vesting | |
| PRSUs | 3-year performance; vest based on ROIC and Cumulative EPS (2024–2026), adding Revenue from 2025–2027 | |
| Stock Options | 10-year term; vest 1/3 annually over 3 years; strike at fair market value; last option grants in 2023 |
Risk Indicators & Red Flags
- Hedging/pledging prohibited for insiders (reduces misalignment risk) .
- Clawback policies cover restatements and misconduct (improves recourse) .
- No related-party transactions disclosed involving Huml in proxy sections reviewed; delinquent Section 16(a) reporting section present but no specific issues noted for Huml in the excerpted materials .
- Insider selling pressure: CEO holds 97,071 options exercisable within 60 days; while pledging is prohibited and ownership guidelines enforce holding, option exercises could create liquidity events; actual Form 4 activity not covered in the proxy data .
Employment & Contracts Summary
| Topic | Details |
|---|---|
| Non-compete & Non-solicit | 12 months post-employment; confidentiality continues |
| Severance (non-CIC) | 2x base salary, pro-rata CIP, 18 months benefits for CEO, subject to good reason/without cause triggers and release |
| Severance (CIC) | 3x annual compensation (base + bonus), pro-rata CIP, 18 months benefits; double-trigger; cutback to avoid excise tax as needed |
Investment Implications
- Alignment and performance: Incentive design ties payouts to EBITDA, ROIC, EPS, and now revenue growth; above-target PRSU outcomes and strong say-on-pay support indicate investor acceptance of pay-for-performance under Huml .
- Retention and selling risk: Robust severance/change-in-control protection lowers near-term retention risk; mandatory holding and anti-pledging policies mitigate misalignment, though a sizable pool of exercisable options (97k shares) could lead to episodic insider sales; monitor Form 4s to assess pressure into vesting/exercise windows .
- Governance quality: Independent Chair and committees, executive sessions, and compensation risk oversight reduce dual-role concerns and enhance Board independence while Huml serves as CEO-director .
- Strategy execution: 2024 delivered record revenue and EBITDA expansion under the new growth strategy with near-target bonus outcomes, followed by the addition of revenue to PRSU metrics for 2025–2027—signaling confidence in top-line acceleration within a disciplined returns framework .