Graham A. Purdy
About Graham A. Purdy
Graham A. Purdy, age 53, is President & Chief Executive Officer (since October 2022) and a director of Turning Point Brands (TPB). He joined TPB in 2004 after seven years at Philip Morris USA in senior sales and sales management positions and holds an A.B. from California State University, Chico . Under his tenure as CEO, TPB reports continued profitability with 2024 net income of $39.8M and Adjusted EBITDA of $104.5M; the company’s “value of $100 investment” stood at $229 for 2024 versus $112 for its small-cap staples peer index, indicating outperformance on TSR in the period disclosed . Purdy is credited with driving successful brand extensions (Zig‑Zag Cigar Wraps, Stoker’s MST), building an “industry‑leading performance management” sales organization, and leading key integrations and product launches .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Turning Point Brands | President & CEO; Director | CEO since Oct 2022; Director since 2022 | Oversight of strategy; continued net income and Adj. EBITDA performance; stockholder return outperformance vs peer index for the period presented |
| Turning Point Brands | Chief Operating Officer | 2019–Oct 2022 | Led operations pre-CEO; continuity into CEO transition |
| Turning Point Brands | President, New Ventures Division; SVP, Sales; other leadership | Not disclosed | Rolled out Zig‑Zag Cigar Wraps and Stoker’s MST, built high‑performing sales organization, led integrations and product launches |
| Philip Morris USA | Senior sales and sales management roles | 7 years (pre‑2004) | Large‑cap tobacco commercial experience and category insight |
External Roles
- No external public company directorships or committee roles for Purdy are disclosed in the proxy biography .
Fixed Compensation
| Category | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary paid ($) | 555,412 | 735,577 | 772,500 (includes $22,500 one‑time adjustment) |
| Non‑equity (annual) bonus paid ($) | 460,178 | 750,000 | 750,000 |
| Item | 2024 | 2025 |
|---|---|---|
| Base salary rate ($) | 750,000 | 750,000 |
| Target annual bonus (% of salary) | 100% | 100% |
| 2024 annual bonus paid ($) | 750,000 | — |
Performance Compensation
| Program | Metric(s) | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual bonus (Management Bonus Program) | Board assessment of financial and individual performance (uses audited results; considers growth and financial metrics) | Not disclosed | 100% of base salary | $750,000 for 2024 | Cash, paid after year‑end |
| 2024 PRSU grant (33,937 shs; $900,009 GDFV) | Cumulative Adjusted EBITDA growth over 3‑year performance period | Not disclosed | Target shares per grant | In‑flight (performance‑based) | 20%/20%/60% over years 1/2/3, subject to performance |
| 2024 RSU grant (22,624 shs; $599,988 GDFV) | Service | — | Target shares per grant | In‑flight (time‑based) | 33% per year over 3 years |
| Historical PRSU design (2015 Plan) | ROIC over 5‑year performance period | — | — | Legacy awards outstanding | Cliff vest at 5 years upon ROIC achievement |
GDFV = Grant Date Fair Value.
Equity Ownership & Alignment
| Ownership item | Detail |
|---|---|
| Total beneficial ownership | 257,822 shares; 1.5% of common shares outstanding as of Mar 7, 2025 |
| Vested/exercisable options | 51,400 shares subject to exercisable stock options included in ownership |
| Near‑term vesting equity | 38,092 RSUs/PSUs vesting within 60 days included in ownership |
| Shares outstanding reference | 17,760,758 shares outstanding as of record date (Mar 7, 2025) |
| Hedging/pledging | Hedging, short sales and trading in options on TPB stock prohibited; pledging requires Audit Committee Chair consent |
| Ownership guidelines | Not disclosed in proxy; corporate governance guidelines exist on website |
Key unvested awards outstanding at 12/31/2024 (selected):
- PRSUs (5/5/2023): 32,359 units (value $1,944,776 at $60.10)
- RSUs (5/5/2023): 17,798 units (value $1,069,660)
- PRSUs (3/1/2024): 33,937 units (value $2,039,614)
- RSUs (3/1/2024): 22,624 units (value $1,359,702)
- Legacy PRSUs (2015 Plan): 6,500 units each from 2020 and 2021 grant cohorts (values $390,350 and $390,650), subject to plan terms
Note: Option holdings also include multiple fully‑vested tranches with exercise prices ranging from $14.85 to $51.75; an additional 8,040 options from 2022 are exercisable with 3,960 unexercisable at year‑end 2024 .
Employment Terms
| Term | Purdy Agreement (CEO) |
|---|---|
| Contract term | Initial 1‑year term from Oct 17, 2022; auto‑renews annually unless 60‑day notice |
| Base salary and targets | $750,000 base; target annual bonus 100% of salary; annual LTI target not less than $500,000 (from 2023 grant cycle) |
| Without Cause / Good Reason (non‑CoC) | 12 months salary continuation + cash severance bonus equal to average annual bonus over prior 24 months + lump‑sum COBRA cost for 12 months; release required |
| Change of Control (within 1 year; double trigger) | 24 months salary continuation + 2x average annual bonus over prior 24 months + lump‑sum COBRA cost for 12 months; release required |
| Restrictive covenants | Non‑compete, non‑solicitation, non‑hire during employment and for two years post‑termination |
| Excise tax provision | Payments reduced to avoid 280G excise tax unless better after‑tax outcome by paying full amount (applies to Purdy) |
| Clawback policy | Effective Oct 30, 2023; recoup certain incentive‑based pay upon accounting restatement per NYSE/SEC rules |
Estimated cash severance as of 12/31/2024:
- Without Cause/Good Reason: $750,000 salary + $605,089 average bonus = $1,355,089 cash; COBRA $20,519; total $1,375,608 .
- Change of Control (double trigger): $1,500,000 salary + $1,210,178 average bonus ×2 computation reflected in table total = $2,710,178 cash; COBRA $20,519; total $2,730,697 .
Board Governance and Service
- Board service: Director since 2022; currently CEO and director; does not receive separate director fees (executives do not earn board fees) .
- Committee roles: Standing committees (Audit; Compensation & Talent; Nominating & Governance) are fully independent; Purdy is not listed as a member of these committees .
- Board leadership: Separate CEO and Executive Chairman roles; Executive Chairman is not independent; Lead Independent Director (Ashley Davis) presides over executive sessions and provides counterbalance to management influence .
- Attendance: The Board met six times in 2024; all directors attended meetings of the Board and their committees except that Messrs. Diao and Reddy each missed one meeting (implying Purdy attended all) .
Director and Executive Compensation Context
| Item | 2024 result |
|---|---|
| Say‑on‑Pay approval | 96.6% support at 2024 annual meeting |
| Compensation consultant | None engaged by Compensation Committee in 2024; benchmarking considered vs other public companies |
| Key pay‑for‑performance measures (company) | Operating Income; Adjusted EBITDA; Return on Invested Capital (used in pay‑versus‑performance analysis) |
Related Policies, Plans, and Perquisites
- Hedging/pledging policy: Hedging and short selling prohibited; pledging requires Audit Committee Chair consent .
- Deferred compensation: Restoration Plan suspended end of 2024; new Non‑Qualified Deferred Compensation Plan (NQDCP) adopted in 2024 allowing deferrals of salary, bonus, and stock units (up to 100% of RSUs/PSUs) .
- Perquisites: Company states it does not provide “excessive” perquisites to NEOs for 2024 .
Risk Indicators and Notable Events
- Internal control material weakness (ITGC) disclosed for 2023; remediation underway with ERP implementation and enhanced ITGCs; full remediation targeted by end of FY2025 .
- Auditor change: Board/Audit Committee replaced RSM US LLP with KPMG LLP in March 2025; change not due to disagreement .
- CFO transition: Former CFO terminated without cause effective Mar 8, 2024; Andrew Flynn appointed CFO Apr 1, 2024 .
Multi‑Year Compensation Summary (Purdy)
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 555,412 | 735,577 | 772,500 |
| Option Awards | 122,760 | — | — |
| Stock Awards | 152,300 | 1,499,984 | 1,499,998 |
| Non‑equity Incentive Plan Comp | 460,178 | 750,000 | 750,000 |
| All Other Compensation | 12,615 | 9,061 | 3,450 |
| Total | 1,303,265 | 2,994,622 | 3,025,948 |
Employment & Contracts (Additional Detail)
| Provision | Summary |
|---|---|
| Auto‑renewal | Annual auto‑renewals unless either party gives ≥60 days’ notice |
| Non‑compete | Two years post‑termination |
| Equity treatment on CoC | Plans generally provide for replacement awards; if none, outstanding awards vest at CoC (performance at target) |
Performance & Track Record Highlights
- Operational wins: Led successful brand extensions (Zig‑Zag Cigar Wraps, Stoker’s MST) and integration of strategic initiatives; built a high‑performing sales organization .
- Company performance (2024): Net income $39.8M; Adjusted EBITDA $104.5M .
- TSR context: “Value of $100 investment” at $229 for 2024 vs $112 for S&P Small Cap 600 Consumer Staples Index peer construct for the period disclosed .
Compensation Structure Analysis
- Mix and design: Shifted from legacy 5‑year ROIC PRSUs to 3‑year cumulative Adjusted EBITDA PRSUs and 3‑year RSUs starting with 2023 awards; aligns with earnings power but lowers duration/risk relative to prior design .
- Equity cadence and potential supply: 2024 awards (33,937 PRSUs and 22,624 RSUs) vest through 2025–2027; 2023 awards (32,359 PRSUs and 17,798 RSUs) continue vesting, creating identifiable windows for insider share deliveries and possible liquidity events upon vest .
- Governance guardrails: NYSE‑compliant clawback adopted in 2023; hedging prohibited; pledging restricted; committees are independent; strong say‑on‑pay results in 2024 .
Equity Ownership Detail (as of Mar 7, 2025)
| Holder | Shares | % |
|---|---|---|
| Graham A. Purdy | 257,822 (incl. 51,400 options exercisable and 38,092 RSUs/PSUs vesting within 60 days) | 1.5% |
Board Governance (Independence and Dual‑Role Implications)
- Purdy is an executive (management) director and therefore not independent; however, TPB separates CEO and Chair roles, appointing an Executive Chairman and a Lead Independent Director to mitigate concentration of authority and to lead independent sessions .
- All three standing committees are fully independent; Purdy is not listed on these committees, which reduces potential conflicts in pay setting, audit oversight, and nominations .
Investment Implications
- Alignment: Purdy’s 1.5% stake plus substantial unvested PRSUs/RSUs tightly link outcomes to stock performance; hedging is barred and pledging tightly restricted, which supports alignment .
- Incentive quality: 3‑year cumulative Adjusted EBITDA PRSUs and ongoing RSU vesting drive medium‑term execution on profitability and growth; shift from 5‑year ROIC to 3‑year EBITDA narrows focus to nearer‑term earnings power .
- Retention and severance risk: Double‑trigger CoC protection at 2x salary and 2x average bonus with 24 months’ salary continuation is competitive but not excessive; non‑CoC at 1x salary plus average bonus provides standard protection—retention risk appears moderate unless a strategic transaction looms .
- Trading signals: Large in‑flight equity grants vesting 2025–2027 (33,937 PRSUs and 22,624 RSUs from 2024; plus 2023 awards) create identifiable periods of potential insider selling once units settle; monitoring Form 4s near vest dates is prudent .
- Governance watch‑items: Ongoing remediation of a 2023 ITGC material weakness (targeting resolution by end‑2025) and an auditor change to KPMG in March 2025 merit monitoring; CFO turnover in 2024 elevates execution risk around controls and reporting during ERP implementation .
- Shareholder support: 96.6% say‑on‑pay approval in 2024 indicates strong investor acceptance of pay program design and outcomes .