Karen Gordon Mills
TOOTSIE ROLL INDUSTRIESAbout Karen Gordon Mills
Karen Gordon Mills, age 71, was appointed President and elected to the Board of Directors of Tootsie Roll Industries (TR) on June 2, 2025; she holds a BA in economics from Harvard University and an MBA from Harvard Business School . She is the daughter of Chairman and CEO Ellen R. Gordon and mother of COO Henry G. Mills, and thus serves as a management (non‑independent) director under NYSE rules . Company performance metrics most relevant to executive pay include 2024 net earnings of $97.837 million, EPS of $1.37, net product sales of $715.530 million, and net earnings at 13.7% of sales; net earnings and EPS rose 6.4% and 7.0% year‑over‑year, respectively . TR’s pay‑vs‑performance framework emphasizes net earnings, EPS, sales growth of core brands, and net earnings as a percentage of sales; the proxy also presents TSR comparisons versus a defined peer group .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| U.S. Small Business Administration | Administrator (23rd) | 2008–2013 | Led federal small business policy and financing programs; executive leadership experience . |
| Various manufacturing and CPG companies | Executive/investor | N/A | Operational and investment oversight in manufacturing/CPG sectors . |
| Harvard Business School | Senior Fellow & Faculty | Since 2014 | Academic thought leadership; management and strategy expertise . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Clarivate Plc | Director | May 2019–Jan 2021 | Public company governance in information services . |
| Churchill Capital Corp III & IV | Director | Through Oct 2020 & Jul 2021 | SPAC governance and transaction oversight . |
| Churchill Capital Corp V & VI | Director | Through Dec 2023 | SPAC governance and sponsor network exposure . |
| Skillsoft Corp. | Director | Since Jun 2021 | Enterprise learning software governance . |
Fixed Compensation
| Component | Amount/Terms | Source |
|---|---|---|
| Base Salary (President) | $999,000 | |
| Director Cash Fees | Company practice in 2024: non‑management directors received annual retainer $125,000; $2,000 per Board meeting; $10,000 Audit Committee membership ($18,000 chair); $2,000 per Compensation Committee meeting. CEO did not receive director fees. (Mills’ director fee treatment not specified.) |
Performance Compensation
TR does not grant stock options, RSUs, PSUs, or other equity‑based awards to employees; executive incentives are cash‑based (MIP, CAP, EBP, SSP) administered by the Compensation Committee and Board .
| Metric/Plan | Weighting | Target | Actual | Payout Mechanics | Vesting/Terms |
|---|---|---|---|---|---|
| Management Incentive Plan (MIP) | Discretionary; factors: net earnings & EPS, increase in sales of core brands & total sales, net earnings as % of sales, cost savings & operational improvements, acquisitions integration, other strategic objectives | Not formulaic; committee discretion | 2024 company metrics considered: Net earnings $97.837m; EPS $1.37; net product sales $715.530m; net earnings 13.7% of sales; net earnings and EPS +6.4% and +7.0% YoY | Annual cash bonus; amounts discretionary per factors | No vesting (cash at payout) . |
| Career Achievement Plan (CAP) | Discretionary fixed‑dollar awards based on long‑term performance and retention | Not formulaic | 2024 awards for NEOs (excluding CEO) ranged $175,000–$546,800 | Deferred cash credited to unfunded account | 5‑year ratable vesting (20%/yr); full vest at 65; immediate lump sum on change‑in‑control; distribution subject to 1‑year non‑compete/non‑solicit; 409A installments allowed for future awards . |
| Excess Benefit Plan (EBP) | Restores retirement benefits above qualified plan limits | N/A | Participates automatically if qualified plan limits bind | Unfunded deferred comp; investment options in mutual funds | Vested; distributions tied to separation; CEO replaced EBP amounts with discretionary cash (policy shift) . |
| Supplemental Savings Plan (SSP) | Deferred compensation elections up to 16% of pay | N/A | Participant‑directed | Unfunded deferred comp | Fully vested; pre/post‑2005 distribution rules; 409A compliant . |
Company pay‑vs‑performance “most important measures” for 2024: net earnings and EPS, increase in sales (core brands & total), net earnings as % of sales; net earnings is most significant quantitatively .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 1,216,984 shares of Common Stock (Direct) . |
| Derivative/Convertible | 1,216,984 shares of Class B Common Stock freely convertible 1:1 into Common Stock (noted as derivative holding in Form 3) . |
| Ownership % of Outstanding | Not disclosed; proxy tables as of Mar 5, 2025 list management owners but do not include Mills due to appointment after proxy; percent not available . |
| Hedging/Pledging | Anti‑hedging policy prohibits directors/executives from hedging company equity; no explicit pledging policy disclosed in proxy excerpts reviewed . |
| Stock Ownership Guidelines | Not disclosed in proxy excerpts reviewed . |
Note: We searched for insider Form 4 transactions (last 24 months) and found Form 3 filings but no Form 4 filings for TR in our document catalog; thus recent open‑market transactions are not evident from available filings. We queried SEC ownership filings (Form 3/4) and retrieved Form 3 references; attempts to read some filings encountered retrieval errors; no Form 4 documents were listed for TR in our tool search .
Employment Terms
| Term | Detail |
|---|---|
| Appointment | Appointed President and Director on June 2, 2025; director term to 2026 Annual Meeting or until successor qualifies . |
| Compensation Eligibility | Eligible to participate in MIP, EBP, and CAP per company practices . |
| Severance/Change‑of‑Control | No specific CIC agreement disclosed for Mills in proxy excerpts; CIC agreements exist for certain other officers (Ember, Bowen) including 3x salary and 3x bonus multiples, pro‑rata bonus, welfare benefits continuation, vesting of deferred plans, and tax gross‑ups under IRC §4999; CAP pays out lump sum on change‑in‑control for participants employed at the time . |
| Non‑Compete/Non‑Solicit | Required for CAP distributions (effective from trigger through one year post‑termination); violation can forfeit certain accrued amounts . |
| Clawbacks | Not disclosed in reviewed excerpts . |
Board Governance
- Board structure: Combined Chair/CEO role; no Lead Independent Director; Audit Chair presides over executive sessions of non‑management directors .
- Controlled company: Gordon family holds >50% of total voting power; NYSE controlled company exemptions apply to governance structures .
- Committees: Audit and Compensation Committees; 2024 Audit Committee independent members included Paula M. Wardynski (Chair), Lana Jane Lewis‑Brent, Michael A. Chodos; Compensation Committee consists of independent directors; full Board sets executive compensation due to controlled status .
- Meeting attendance: Board held four meetings in 2024; all directors attended ≥75% of meetings of the Board and their committees except one director at 70% .
- Independence: Non‑management directors (except Virginia L. Gordon) deemed independent under NYSE standards; Mills is a management director and immediate family of the CEO, and thus would not be independent .
Director Compensation (reference framework)
| Name (2024) | Fees Earned/Paid in Cash | All Other Compensation | Total |
|---|---|---|---|
| Barre A. Seibert | $146,230 | $1,000 | $147,230 |
| Lana Jane Lewis‑Brent | $145,000 | — | $145,000 |
| Paula M. Wardynski | $151,770 | $2,000 | $153,770 |
| Virginia L. Gordon | $133,000 | — | $133,000 |
Non‑management director schedule: $125,000 annual retainer; $2,000 per Board meeting; $10,000 Audit Committee membership ($18,000 chair); $2,000 per Compensation Committee meeting; CEO did not receive director fees .
Compensation Peer Group (used for benchmarking)
| Company | Annual Revenues (USD mm) | Market Cap (USD mm) (02/28/2025) |
|---|---|---|
| B&G Foods, Inc. | $1,932 | $528 |
| Campbell Soup Company | $9,636 | $11,938 |
| Farmer Brothers Co. | $341 | $64 |
| Flowers Foods, Inc. | $5,103 | $3,955 |
| General Mills, Inc. | $19,857 | $33,759 |
| Hain Celestial Group, Inc. | $1,736 | $323 |
| The Hershey Company | $11,202 | $25,621 |
| J & J Snack Foods Corp. | $1,575 | $2,559 |
| The J.M. Smucker Company | $8,179 | $11,760 |
| John B. Sanfilippo & Son, Inc. | $1,067 | $823 |
| Kellanova | $12,749 | $28,402 |
| Lancaster Colony Corporation | $1,872 | $5,253 |
| McCormick & Co., Inc. | $6,724 | $22,181 |
| Nature’s Sunshine Products, Inc. | $445 | $270 |
| Post Holdings, Inc. | $7,923 | $6,618 |
| Seneca Foods Corporation | $1,459 | $559 |
| The Simply Good Foods Company | $1,331 | $3,790 |
| TreeHouse Foods, Inc. | $3,354 | $1,643 |
Consultant: Compensation Strategies, Inc.; total compensation for executive officers at median after size adjustments; consultant reported no conflicts .
Company Performance Context (for pay decisions)
| Metric | FY 2024 | Source |
|---|---|---|
| Net Earnings (USD) | $97,837,000 | |
| EPS (USD) | $1.37 | |
| Net Product Sales (USD) | $715,530,000 | |
| Net Earnings as % of Sales | 13.7% | |
| YoY Net Earnings Growth | +6.4% | |
| YoY EPS Growth | +7.0% |
Additional Policies and Signals
- Insider Trading/Anti‑Hedging: Directors and executive officers are prohibited from engaging in hedging transactions on company equity; insider trading policy filed as an exhibit to a March 27, 2025 8‑K .
- Controlled Company governance: full Board, rather than a separate nominating committee, oversees director nominations; combined Chair/CEO structure maintained for efficiency at current board size .
- Related Party Transactions: Policy requires disinterested Board approval/ratification on market terms; no related person transactions required to be disclosed for 2024 .
Investment Implications
- Alignment and retention: Mills’ compensation will be heavily fixed (salary capped at $999k) with variable awards via MIP and CAP determined at Board discretion tied to net earnings/EPS/sales quality; CAP’s five‑year vesting and non‑compete requirement reinforce retention and reduce immediate turnover risk .
- Governance overhang: TR’s controlled company status, family relationships (Mills as daughter of CEO and mother of COO), combined Chair/CEO role, and lack of a lead independent director heighten governance risk and potential minority shareholder concerns .
- Change‑in‑control economics: While Mills’ specific CIC agreement is not disclosed, company practice includes rich CIC packages (3x salary/bonus, tax gross‑ups) for certain executives and immediate CAP payout at CIC—important for transaction modeling and potential deal friction .
- Trading signals: Initial Form 3 shows substantial direct holdings; absence of recent Form 4s in our catalog suggests no disclosed open‑market activity yet—monitor future Form 4s for selling pressure, and watch 8‑K/deferral elections for CAP/EBP changes that could alter cash flow timing .
- Pay‑for‑performance lens: Discretionary design emphasizes profitability and brand sales growth rather than preset targets/TSR hurdles; investors should focus on net earnings sustainability, margin discipline, and any acquisitions integration progress, as these drive bonus decisions and CAP awards .
Dual‑Role implications (President + Director)
- As an executive/family director, Mills is not independent; committee assignments were not specified at appointment; Board independence is maintained through independent Audit/Compensation Committees, though nomination and pay decisions leverage full Board due to controlled status .
- Executive sessions are chaired by the Audit Chair; combined Chair/CEO structure and family ties warrant elevated scrutiny on related‑party policies and compensation discretion .