Richard Zay
TENNANTAbout Richard Zay
Richard H. Zay (age 54) is Senior Vice President and Chief Commercial Officer at Tennant Company, a role he has held since March 2021. He joined Tennant in 2010 and previously served as SVP Global Marketing, SVP of the Americas business unit, and later assumed responsibility for R&D in 2018; earlier roles include leadership positions at Whirlpool (General Manager, KitchenAid) and Maytag (VP Jenn-Air, Director of Marketing) . Company performance underpinning his pay-for-performance incentives: 2024 net sales rose 3.5% year-over-year (3.2% organic) and Adjusted EBITDA increased to $208.8 million with a 70 bps margin expansion; 2024 annual cash incentive paid at 98.7% of target and the 2022–2024 PRSU cycle paid at 123.8% of target . Tennant’s recent compensation alignment analysis shows realizable pay generally aligned with strong relative three-year TSR versus peers, a framework applied to all Named Executives including Zay .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Tennant Company | SVP, Chief Commercial Officer | 2021–present | Oversees enterprise commercial strategy; accountable for annual EBITDA$, EBITDA% and revenue metrics used in CIP and multi-year ROIC/EPS metrics used in LTIP . |
| Tennant Company | SVP, Global Marketing; SVP, Americas BU; R&D responsibility | 2013–2020s | Led global marketing and Americas; assumed R&D responsibility in 2018, supporting product innovation underpinning growth strategy . |
| Whirlpool Corporation | General Manager, KitchenAid Brand | 2006–2010 | Led a premium brand business unit, relevant to Tennant’s go-to-market execution . |
| Maytag Corporation | VP Jenn-Air; Director of Marketing (Maytag Brand); Director, Cooking Category Mgmt | 1993–2006 | Managed consumer brands/segments, experience leveraged in commercial strategy . |
External Roles
- No external public company board roles or directorships disclosed for Zay in the cited filings. Skip.
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $466,395 | $492,308 | $511,069 |
| Annualized Base Salary rate (as of Apr 1) | — | — | $514,818; +3.0% vs 2023 |
| Target CIP (% of base) | 70% | 70% | 70% |
| Target LTIP (% of base) | 160% | 160% | 160% |
Performance Compensation
Annual Cash Incentive Plan (CIP) – 2024
| Metric | Weight | Threshold | Target | Max | Actual | Payout vs target |
|---|---|---|---|---|---|---|
| Adjusted EBITDA$ (thousands) | 50% | $166,000 | $205,000 | $220,000 | $204,172 | 98.7% overall payout |
| Adjusted EBITDA% | 25% | 14.4% | 16.0% | 16.6% | 15.97% | 98.7% overall payout |
| Total Revenue (thousands) | 25% | $1,154,000 | $1,282,000 | $1,353,000 | $1,278,565 | 98.7% overall payout |
| Zay’s non-equity incentive (CIP paid) | — | — | — | — | — | $355,688 |
Long-Term Incentive Plan (LTIP)
- 2024 grant mix: 50% PRSUs; 50% Restricted Stock; Stock options discontinued in 2024 LTIP .
- 2024–2026 PRSU metrics and weights: Incentive ROIC 60%; Cumulative EPS 40%; threshold pays 50%, max 200%; targets confidential; vests 12/31/2026 .
- 2022–2024 PRSU results: Incentive ROIC actual 19.18% (threshold 16.6%, target 22.1%, max 24.3%); Cumulative EPS actual $18.24 (threshold $11.95, target $15.94, max $17.53); cycle payout 123.8% of target .
- 2025–2027 PRSU metrics: adds Cumulative Revenue (34%); ROIC (33%); EPS (33%) .
2024 Grants (Zay)
| Award | Grant date | Target | Max | Vesting |
|---|---|---|---|---|
| PRSUs | 2/27/2024 | 3,739 units | 7,478 units | 3-year performance; vests 12/31/2026 |
| Restricted Stock | 2/27/2024 | 3,739 shares | — | 100% cliff vest at 3 years |
Equity Ownership & Alignment
Beneficial Ownership and Guidelines
| Item | Detail |
|---|---|
| Beneficial ownership | 96,086 shares; includes options exercisable within 60 days: 71,046 |
| Ownership % | Less than 1% of shares outstanding (asterisk) |
| Shares outstanding baseline | 18,806,189 (as of Mar 6, 2025) |
| Ownership guideline | 2× base salary for non-CEO/CFO executives; compliance: Zay achieved requirement |
| Hedging/pledging policy | Hedging and pledging of company stock prohibited for directors/officers/access persons |
Vesting schedules and 2024 realizations
| Item | 2024 activity |
|---|---|
| Options exercised (shares) | 14,743; value realized $739,835 |
| Stock awards vested (shares) | 8,082; value realized $891,781 |
| RS vesting terms | 100% vests on third anniversary of grant |
| PRSU vesting terms | Earned based on 3-year ROIC/EPS; vests end of cycle (e.g., 12/31/2024, 12/31/2025, 12/31/2026 for respective grants) |
Outstanding Equity (Year-end 2024)
| Grant type | Grant date | Exercisable options (#) | Unexercisable options (#) | Exercise price | Expiration |
|---|---|---|---|---|---|
| Stock options | 02/26/2016 | 7,053 | — | $52.42 | 02/26/2026 |
| Stock options | 02/28/2017 | 12,565 | — | $73.20 | 02/28/2027 |
| Stock options | 02/27/2018 | 13,871 | — | $67.70 | 02/27/2028 |
| Stock options | 02/26/2019 | 14,891 | — | $63.65 | 02/26/2029 |
| Stock options | 02/25/2020 | 8,068 | — | $82.29 | 02/25/2030 |
| Stock options | 03/02/2021 | 8,133 | — | $78.24 | 03/02/2031 |
| Stock options | 03/01/2022 | 5,342 | 2,671 | $78.78 | 03/01/2032 |
| Stock options | 02/28/2023 | 2,753 | 5,505 | $72.88 | 02/28/2033 |
| Stock awards | Grant date | Unvested RS (#) | Market value (12/31/2024, $81.53/share) |
|---|---|---|---|
| RS | 03/01/2022 | 2,385 | $194,449 |
| RS | 02/28/2023 | 2,743 | $223,637 |
| RS | 02/27/2024 | 3,739 | $304,841 |
| Equity incentive (PRSU target) | Grant date | PRSUs target (#) | Market/payout value basis |
|---|---|---|---|
| PRSUs (2022–2024 cycle) | 03/01/2022 | 4,770 (target) | $388,898 market value at 12/31/2024 |
| PRSUs (2023–2025 cycle) | 02/28/2023 | 5,487 (target) | $447,355 market value at 12/31/2024 |
| PRSUs (2024–2026 cycle) | 02/27/2024 | 3,739 (target) | $304,841 market value at 12/31/2024 |
Notes: Market values computed by the company at $81.53/share as of 12/31/2024 .
Employment Terms
| Provision | Key terms (Zay) |
|---|---|
| Agreements | Party to Executive Employment Agreement (employment/severance) and Management Agreement (change-in-control) . |
| Non-compete / non-solicit | 12 months post-termination; confidentiality covenants; cooperation requirements . |
| Severance – no CIC (without cause or for good reason) | Cash severance equal to 1× base salary; pro-rata CIP (based on actual results, capped at target); benefits continuation up to 12 months . |
| Severance – CIC (double trigger) | Lump sum: 3× annual compensation (base plus higher of target CIP or 3-year average payout), pro-rata CIP at target, plus 18× company premium portion for medical/dental/life . |
| Equity treatment | Equity awards generally accelerate/lapse restrictions upon a change in control (single trigger for equity), while cash severance requires termination (double trigger) . |
| Illustrative payouts (as of 12/31/2024) | Termination without cause: Cash $514,818; CIP $355,688; Benefits $19,313; Total $889,819 . CIC within 3 years: Cash $2,799,948; CIP target $360,373; Benefits $28,970; Total $3,189,290; plus accelerated equity awards value $1,918,983 . |
| Clawbacks | Restatement-based clawback (3-year lookback) and misconduct-based recoupment policies for executives/access persons . |
| Tax gross-ups | No excise tax gross-ups; payments may be reduced to avoid 280G excise tax where “net best” . |
Compensation Structure Analysis
- Year-over-year cash vs equity: 2024 retained heavy equity tilt; long-term incentives 100% equity, with options removed from LTIP starting 2024 (shift toward RS/PRSUs) .
- At-risk pay: CIP paid at 98.7% for 2024 and PRSU cycle 2022–2024 paid at 123.8% (above target), evidencing pay alignment with EBITDA, margin, revenue, ROIC, and EPS performance .
- Ownership alignment: Executive stock ownership guidelines enforced; Zay is in compliance; mandatory holdbacks until compliance; hedging and pledging prohibited (reduces misalignment risk) .
- Say-on-pay: High shareholder support (≈95% approval in 2024), reducing governance overhang risk .
- Peer benchmarking: Comparator group of 18 industrials; program targets base ≈50th percentile; incentives 50th–75th percentile; Committee annually calibrates goals to be challenging .
Performance & Track Record
| Period/Metric | Company performance context (drivers relevant to Zay’s incentives) |
|---|---|
| FY2024 | Record net sales (+3.5% YoY; +3.2% organic); Adjusted EBITDA $208.8 million; margin +70 bps; CIP metrics met near target (98.7% payout) . |
| 2022–2024 LTIP | Incentive ROIC and Cumulative EPS over-achieved relative to targets → 123.8% payout . |
| 2025 Q3 (latest public update) | Adjusted EBITDA margin 16.4% (+120 bps YoY); adjusted diluted EPS $1.46; adjusted operating margin 11.7%; indicative continued margin management under commercial strategy . |
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited for executives/directors/access persons (reduces alignment risk) .
- Equity acceleration: Single-trigger acceleration on change in control for equity may create sell pressure post-transaction; cash is double-trigger .
- Discretionary awards: 2022 discretionary bonus ($125,000) for expanded/interim operations role—transparent disclosure, not recurring in 2023–2024 .
- Legal/ESG: No individual legal proceedings disclosed for Zay; company maintains clawbacks and risk reviews of comp plans .
- Say-on-pay: Strong support ≈95% (2024) mitigates compensation controversy risk .
Compensation & Ownership Summary (Multi-year)
| Year | Salary ($) | Stock Awards ($) | Option Awards ($) | CIP Paid ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2022 | $466,395 | $563,671 | $187,911 | $193,803 | $33,133 | $1,570,156 |
| 2023 | $492,308 | $599,802 | $199,937 | $699,752 | $52,453 | $2,044,252 |
| 2024 | $511,069 | $823,776 | — (options removed from LTIP) | $355,688 | $80,691 | $1,771,224 |
Equity Ownership Detail (Beneficial & Awards)
| Item | Quantity | Notes |
|---|---|---|
| Beneficial shares | 96,086 | Includes 71,046 options exercisable within 60 days . |
| 2024 options exercised | 14,743 | Value realized $739,835 . |
| 2024 stock vested | 8,082 | Value realized $891,781 . |
| PRSUs outstanding (target counts) | 4,770 (2022 grant); 5,487 (2023); 3,739 (2024) | Market values at $81.53/share as of 12/31/2024 shown in table above . |
| RS unvested | 2,385 (2022); 2,743 (2023); 3,739 (2024) | RS vests 3-year cliff . |
Employment Terms (Amounts If Event Occurred on 12/31/2024)
| Scenario | Cash Severance | CIP | Benefits | Equity Acceleration | Total |
|---|---|---|---|---|---|
| Termination without cause / good reason (no CIC) | $514,818 | $355,688 | $19,313 | See RS/options/PRSUs per plan | $889,819 |
| CIC within 3 years (double trigger) | $2,799,948 | $360,373 | $28,970 | $1,918,983 | $3,189,290 (excl. equity value shown separately) |
Compensation Peer Group (Benchmarking)
- 18 peers: ALG, ASTE, B, GTLS, CIR, CMCO, DCI, EPAC, ESE, FSS, GGG, HLIO, NDSN, SXI, GRC, MIDD, TG, WTS; revenues $521M–$4,033M; market cap $306M–$12,727M at approval (Apr 2023) .
Say-on-Pay & Shareholder Feedback
- 2024 advisory vote approval ≈95%; program emphasizes performance-based pay, multi-year vesting, equity-only LTIP, clawbacks, and hedging/pledging prohibitions .
Investment Implications
- Incentive alignment: Zay’s pay is tightly linked to EBITDA$, EBITDA%, revenue (annual) and ROIC/EPS (multi-year); 2024 near-target CIP payout and above-target PRSU payout signal operational execution and value creation under his commercial leadership .
- Selling pressure: 2024 option exercises (14,743 shares) and vesting (8,082 shares) indicate periodic supply; however, removal of options from new LTIP awards should reduce future option-driven selling over time .
- Retention/transition: Robust CIC economics (3× annual comp + equity acceleration) and achieved ownership guideline reduce near-term retention risk; single-trigger equity acceleration in CIC could create event-driven liquidity/supply .
- Governance quality: Strong say-on-pay support, clawbacks, and prohibitions on pledging/hedging reduce red flag risk; committee-calibrated, challenging targets and independent consultant oversight support ongoing pay-for-performance discipline .