Ellen Gordon
TOOTSIE ROLL INDUSTRIESAbout Ellen Gordon
Ellen R. Gordon (age 93) is Chairman of the Board and Chief Executive Officer of Tootsie Roll Industries, Inc. (TR). She has been a director since 1969, served as President and Chief Operating Officer since 1978, and became Chairman and CEO in January 2015 . She is also Director and Vice-President of HDI Investment Corp., has served on boards of several nationally recognized graduate business and medical schools, and previously served on the board of a large public company where she chaired its audit committee . Under her leadership, TR emphasizes conservative finance and long-term brand building; pay-versus-performance disclosures highlight multi-year trends in sales, net earnings, margins, and TSR used in compensation deliberations .
Company performance context during the last five fiscal years:
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Sales ($000s) | 467,427 | 566,043 | 681,440 | 763,252 | 715,530 |
| Net Earnings ($000s) | 58,974 | 65,308 | 75,892 | 91,886 | 97,819 (ex-NCI and per MIP definition; 2024 also excludes a $11.0M non-cash DTA write-off) |
| Net Earnings as % of Sales | 12.6% | 11.5% | 11.1% | 12.0% | 13.7% |
| Company TSR (Indexed to $100) | 91 | 115 | 141 | 114 | 116 |
Notes: 2024 MIP “Net Earnings” excludes extraordinary/non-recurring items per plan; EPS for 2024 referenced in MIP assessment was $1.37 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Tootsie Roll Industries, Inc. | Chairman & CEO | 2015–present | Combined leadership and strategy execution; board chair role central to governance and oversight . |
| Tootsie Roll Industries, Inc. | President & COO | 1978–2014 | Led operations and growth of core confectionery brands . |
| Tootsie Roll Industries, Inc. | Director | 1969–present | Long-tenured director with deep industry knowledge . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| HDI Investment Corp. | Director and Vice-President | Not disclosed | Family investment company; governance and capital stewardship . |
| Large public company (name not disclosed) | Director; Audit Committee Chair | Not disclosed | Financial oversight leadership as audit chair . |
| Graduate business and medical schools (various) | Board member | Not disclosed | External network and talent/academic engagement . |
Fixed Compensation
- Program design: TR does not grant equity to any employees, including the CEO; the Board emphasizes cash salary, MIP bonuses, and nonqualified plans. CEO salary is capped at $999,000; due to tax law changes, the CEO no longer accrues CAP/EBP and receives a discretionary cash replacement to avoid economic loss .
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 999,000 | 999,000 | 999,000 |
| All Other Compensation | 1,934,172 (incl. nonqualified plan earnings/perqs) | 2,129,683 | 1,960,551 |
| Total Compensation | 6,793,272 | 7,289,683 | 7,204,551 |
Perquisites (2024):
- Company aircraft for business travel between headquarters and other executive-office locations: $1,678,458; limited personal travel: $80,999; Board approved for efficiency/security (aggregate incremental cost basis) .
- Company apartment while working at HQ: $101,513 .
- Automobile and driver for the CEO when in Chicago .
Clawback: Adopted effective December 1, 2023, covering certain executive compensation in case of material accounting misstatements or non-compliance with financial reporting requirements under NYSE Rule 303A-14 and Exchange Act Section 10D .
Performance Compensation
Design and 2024 outcomes:
- Management Incentive Plan (MIP): Discretionary annual cash bonus; no pre-set weightings; committee considers Net Earnings, EPS, sales growth (core and total), margins, cost savings, acquisitions, and other strategic objectives. 2024 MIP evaluation cited net earnings of $97,837,000 and EPS of $1.37; net product sales of $715,530,000; net earnings margin 13.7% .
- CEO supplemental discretionary bonus: $1,177,000 to replace CAP/EBP accruals foregone due to tax-driven design changes .
- No stock options, RSUs, PSUs or other equity awards are granted to any employees, including the CEO .
| Metric | Target | Actual (2024) | Weighting | Payout Mechanics | CEO Payouts |
|---|---|---|---|---|---|
| Net Earnings | Not pre-set (discretionary) | $97,837,000 (per MIP definition) | Discretionary | Committee discretion; considers YoY changes | Included in MIP bonus: $4,245,000 (2024) |
| EPS | Not pre-set | $1.37 (per MIP definition) | Discretionary | Committee discretion | Included in MIP bonus |
| Sales (Core/Total) | Not pre-set | $715,530,000 total sales | Discretionary | Committee discretion | Included in MIP bonus |
| Margin (Net earnings % sales) | Not pre-set | 13.7% | Discretionary | Committee discretion | Included in MIP bonus |
| CAP (deferred cash) | Not applicable to CEO in 2024 | N/A | N/A | CEO excluded; replaced by discretionary cash | $1,177,000 supplemental |
Benchmarking and committee process:
- Consultant: Compensation Strategies, Inc. (management-selected, Board-approved); no conflicts reported .
- Peer group: 18 public companies across snack/food/beverage; Board found total executive compensation at median vs peers after adjusting for size (Feb 28, 2025 market caps; revenues span $341M–$19.9B) .
- Say-on-pay: ~96.4% approval in 2023; Board made no significant changes as a result .
Equity Ownership & Alignment
- Anti-hedging: Directors and executive officers are prohibited from hedging Company stock via derivative securities .
- Equity-based pay: None granted to any employees, including CEO .
- Director fees: CEO receives no director/committee fees .
Beneficial ownership (as of March 5, 2025):
| Holder | Class | Direct Shares | Indirect/Fiduciary Shares | % of Class |
|---|---|---|---|---|
| Ellen R. Gordon | Common | 13,475,338 | 104,673 (trust) | 33.5% (for Common) |
| Ellen R. Gordon | Class B | 14,898,954 | — | 49.2% (for Class B) |
| Ellen R. Gordon (as fiduciary) | Common | — | 6,175,631 (incl. family fiduciary and foundation) | 15.2% (for Common) |
| Ellen R. Gordon (as fiduciary) | Class B | — | 6,035,147 | 19.9% (for Class B) |
Nonqualified plans — CEO balances (12/31/2024):
| Plan | Company Contributions (Last FY) | Aggregate Earnings (Last FY) | Balance at FYE |
|---|---|---|---|
| Excess Benefit Plan (EBP) | $0 | $7,064,042 | $35,362,950 |
| Career Achievement Plan (CAP) | $0 | $3,828,138 | $23,547,436 |
| Supplemental Savings Plan (SSP) | $0 | $674,372 | $3,728,928 |
Notes: CEO ceased accruing CAP/EBP after design changes; balances reflect long-term accruals and investment returns. CAP distributions (for participants) are subject to non-compete/non-solicit; CEO no longer participates prospectively but holds legacy balances .
Pledging: No explicit share-pledging disclosure or anti-pledging policy identified in the proxy; anti-hedging policy is in place .
Employment Terms
- Employment agreement: None; no severance agreements for CEO .
- Change-in-control: CEO has no CIC agreement (Board cites significant equity stake); CIC agreements and excise tax gross-ups exist for two other officers (Ember, Bowen), not for CEO .
- Clawback: Compensation clawback policy effective Dec 1, 2023 .
- Non-compete/non-solicit: Apply to CAP distributions; CAP vests 20% annually over 5 years with accelerated vesting upon death, disability, or retirement after age 65; CIC triggers immediate lump sum CAP payout for participants .
Board Governance (Director-Service Specifics and Dual-Role Implications)
- Role: Combined Chairman & CEO; no lead independent director; Board believes combined role suits company size/circumstances and facilitates strategy and information flow .
- Controlled company: Gordon family collectively holds >50% of voting power; certain NYSE independence requirements not applicable; Compensation Committee operates without a formal charter with full Board making CEO and officer pay decisions (CEO recuses on her pay) .
- Committee memberships: CEO is not an Audit or Compensation Committee member; non-management directors (Chodos, Lewis-Brent, Wardynski) serve on Audit and Compensation Committees .
- Independence: All non-management directors except Virginia L. Gordon are independent under NYSE standards .
- Meetings: Board met 4 times in 2024; all directors attended at least 75% of Board/committee meetings except one director at 70%; CEO attended the 2024 Annual Meeting .
- Director compensation (non-management 2024): Annual board retainer $125,000; $2,000 per Board meeting; Audit Committee retainer $10,000 ($18,000 for Chair); $2,000 per Compensation Committee meeting; CEO received no director fees .
Dual-role implications: The combined Chair/CEO role without a lead independent director and controlled-company status can concentrate authority and limit independent oversight; the Board cites size and continuity benefits, but investors should weigh governance trade-offs and potential independence concerns .
Compensation Committee & Peer Benchmarking
- Governance: Compensation Committee administers the MIP; full Board determines executive compensation; CEO recuses on her own compensation .
- Consultant: Compensation Strategies, Inc. engaged; no conflicts reported .
- Peer group (selected examples): Hershey, Campbell Soup, Kellanova, McCormick, J.M. Smucker, Post Holdings, TreeHouse Foods; peer revenues ~$0.34B–$19.86B, market caps ~$0.06B–$33.76B (as of 2/28/2025) .
- Competitive positioning: Total executive compensation at median vs peers after size adjustment; no targeted percentile used .
Say-on-Pay & Shareholder Feedback
- 2023 say-on-pay support: ~96.4% approval; Board made no significant changes in response .
Investment Implications
- Alignment and selling pressure: CEO has substantial long-term ownership across both classes (33.5% of Common and 49.2% of Class B directly; additional fiduciary holdings), and TR grants no equity—reducing mechanical vesting/selling overhang; anti-hedging policy mitigates misalignment risk .
- Governance risk: Controlled-company status, combined Chair/CEO without a lead independent director, and discretionary bonus design (including replacement cash for CAP/EBP) elevate governance and pay-for-performance scrutiny despite strong say-on-pay support .
- Performance linkage: The MIP is discretionary but anchored to Net Earnings, EPS, sales growth, and margins; 2024 results showed higher net earnings and margin with a slight sales decline versus 2023, which supported CEO bonus outcomes .
- Succession considerations: At age 93, CEO remains “vigorously engaged” with no present intention to retire; Board reviews succession planning periodically—investors should monitor continuity plans and potential transition catalysts .
Overall, the combination of concentrated ownership, cash-based and discretionary incentive design, and controlled-company governance can support long-term stability but warrants continued monitoring of capital allocation, succession, and independent oversight quality .