Lee Rudow
About Lee Rudow
Lee D. Rudow, age 61, is President and Chief Executive Officer of Transcat, Inc. (TRNS). He joined as COO in November 2011, became President in September 2012, and was appointed CEO in July 2013, bringing 35+ years of calibration and distribution industry experience across startups, private equity–backed, and large industrial companies . Under his leadership, FY2025 revenue grew 7.3% to $278.4 million and Adjusted EBITDA was $39.7 million; the Service segment recorded its 64th consecutive quarter of year-over-year growth, underscoring durable recurring demand in regulated markets . Over 2021–2025, company TSR rose from an initial $100 to $280.94 and Net Income reached $14.5 million in FY2025 . Rudow also serves on Transcat’s Board and Executive Committee .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Transcat, Inc. | Chief Operating Officer | Nov 2011–Sep 2012 | Led operations pre-CEO; foundation for subsequent Service growth |
| Transcat, Inc. | President | Sep 2012–Jul 2013 | Positioned for CEO transition and strategy execution |
| SIMCO Electronics | Vice President (various capacities) | 2008–2011 | Expanded calibration services expertise; competitive insight |
| Davis Calibration, Inc. | President & CEO | 2006–2008 | Ran calibration provider; leadership in core market |
| Davis Inotek Corp. | President & CEO | 1996–2006 | Grew related calibration/service businesses |
| Davis Instruments Corp. | President | 1986–1996 | Led instrumentation distribution; sector domain expertise |
External Roles
- No external public company board roles disclosed for Rudow .
Fixed Compensation
| Metric | FY2024 | FY2025 |
|---|---|---|
| Base Salary Rate (CEO) | $617,210 | $649,600 |
| CEO Pay Ratio | 33:1 (FY2024 median comp not disclosed here) | 28:1 |
Performance Compensation
Annual Performance-Based Cash Incentive (FY2025)
| Component | Weight | Target Framework | Actual FY2025 Achievement |
|---|---|---|---|
| Adjusted EBITDA | 40% | Threshold 90% → 33% payout; Target 100% → 100%; Max 115% → 200% | 78% (below threshold → 0% for this metric) |
| Service Segment Gross Profit | 40% | Same threshold/target/max schedule | 90% (threshold) |
| Board Assessment of Corporate Performance | 20% | Same schedule | 100% (target) |
| CEO FY2025 Cash Incentive Award | — | — | $194,968 |
Long-Term Equity Incentive Awards (Granted FY2025)
| Award Type | Target vs Base | Granted Shares | Vesting Terms | Performance Metric |
|---|---|---|---|---|
| PSUs (CEO) | 150% of base salary | 3,925 | 3-year performance period ending Mar 27, 2027; pro rata vesting on certain terminations | Cumulative Adjusted EBITDA: 50% min, 100% target, 150% max |
| RSUs (CEO) | 150% of base salary (split with PSUs) | 3,925 | Cliff vest Mar 27, 2027; pro rata vesting on certain terminations | |
| PSU/RSU Grant Date Fair Value (CEO) | — | — | $487,171 each for PSUs and RSUs |
Multi-Year Compensation (Summary)
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2023 | 523,654 | 439,979 | 272,357 | 20,444 | 1,444,134 |
| 2024 | 639,282 | 1,127,440 | 652,700 | 21,038 | 2,440,460 |
| 2025 | 625,861 | 974,400 | 194,968 | 20,131 | 1,815,360 |
Equity Ownership & Alignment
| Item | Details |
|---|---|
| Total Beneficial Ownership | 103,864 shares; 1.1% of outstanding |
| Options (CEO) | 10,000 unexercisable at $63.17; exp. 5/25/2027 |
| In-the-Money Option Value (as of 3/29/2025) | $102,100 |
| Unvested RSUs (CEO) | 3,785 (vest 3/28/2026); 5,000 (vest 3/28/2026); 3,925 (vest 3/27/2027) |
| Unvested PSUs (CEO) | 3,784 (cycle ending 3/28/2026); 3,925 (cycle ending 3/27/2027) |
| Stock Ownership Guidelines | CEO: 2.5x base salary; unvested RSUs count; all NEOs compliant at FY2025 end |
| Hedging/Pledging | Anti-hedging policy prohibits hedging; insider policy prohibits pledging/hypothecating company stock |
Employment Terms
- Role/Tenure: CEO since July 2013; President since 2012; COO since 2011 .
- Employment Agreements: No individual employment agreement; change-in-control severance agreement in place .
- Change-in-Control: Double-trigger required; immediate vesting of options/RSUs/PSUs (PSUs at greater of accrued or target); salary/benefits continuation (CEO: 24 months) .
- Estimated CIC/Separation Economics (as of 3/29/2025): CIC scenario totals $5.46 million (includes severance $1,299,200; annual incentive $1,104,320; options $102,100; PSUs $565,686; RSUs $932,660; other $50,000) .
- Clawback: Recoupment policy for restatements and detrimental conduct; applies to performance- and time-vesting awards and bonuses .
- Post-Retirement Benefits: CEO eligible for officer health plan with long-term care, medical/dental, and premium reimbursement under legacy plan .
- Insider Trading Windows/Preclearance: 30-day windows after earnings releases; event-specific blackouts; preclearance required for insiders .
Performance & Track Record
| Metric | FY2024 | FY2025 |
|---|---|---|
| Total Revenue ($mm) | $259.5 | $278.4 |
| Service Revenue ($mm) | $169.5 | $181.4 |
| Distribution Revenue ($mm) | $90.0 | $97.0 |
| Adjusted EBITDA ($mm) | $38.6 | $39.7 |
| Net Income ($mm) | $13.6 | $14.5 |
| Company TSR (Value of $100 initial investment) | $420.49 (2024 cumulative) | $280.94 (2025 cumulative) |
- Service segment achieved 64 consecutive quarters of YoY growth; FY2025 Service growth +7.0% including acquisitions (Martin; Becnel) .
- Strategic initiatives: Largest acquisition in company history (Martin Calibration), expanding dimensional/mechanical capabilities; continued automation and process improvement in labs to enhance margins .
- Execution risks: Transcat Solutions (formerly NEXA) experienced erosion and is being integrated into core sales/operations; stabilization underway with sales playbook adoption .
Board Governance
- Board Independence/Structure: All directors except CEO are independent; roles of Chair and CEO are separated; independent directors hold executive sessions .
- Committees: Rudow serves on Executive Committee; standing committees include Audit (Chair: Dominach), Compensation (Chair: Cairns), NESG (Chair: Kaniki), Technology (Chair: Langston) .
- Attendance/Meetings: Board held 8 meetings in FY2025; each director attended at least 75% of Board/committee meetings .
- Lead Independent Director Policy: If Chair and CEO combined, Board will appoint Lead Independent Director per guidelines (not currently applicable) .
- Board Declassification: Shareholders approved declassification (99% support in 2024); beginning 2025, directors elected for one-year terms .
Board Service History/Committee Roles/Dual-role Implications
- Rudow: CEO and director; member of Executive Committee . Dual role mitigated by separate non-executive Chair and majority independent Board; independence frameworks and executive sessions promote oversight .
Director Compensation (Rudow as director)
- No director fees paid to employees; CEO receives no separate director compensation .
Say-on-Pay & Shareholder Feedback
- FY2024 Say-on-Pay Approval: 97% .
- FY2025 Annual Meeting Results: Say-on-Pay votes For 7,842,250; Against 75,934; Abstain 4,704; Broker Non-Votes 542,212 .
- Frequency Vote: “1 Year” selected; Board adopted annual say-on-pay going forward .
Compensation Peer Group
- Peer Group includes: AeroVironment, Argan, CIRCOR, Cryoport, Cutera, Ducommun, Enzo Biochem, Harvard Bioscience, InfuSystem, Inogen, Kaman, LeMaitre Vascular, Ligand, Mesa Laboratories, Powell Industries, Standex, Surmodics, Twin Disc, Willis Lease Finance .
- Consultant: FW Cook engaged; no conflicts; used for market context/peer alignment .
- Policy Actions: Market-driven “out of step” increases for CEO and select NEOs to align pay levels; continued realignment contemplated in FY2026 .
Compensation Structure Analysis
- Mix Shifts: Emphasis on RSUs/PSUs; no options granted in FY2025 to NEOs, reducing risk versus options .
- At-Risk Pay: Majority of CEO target compensation in variable components (annual bonus + long-term equity) .
- Metrics/Stringency: FY2025 corporate metric outcomes were mixed (Adj. EBITDA 78%, Service gross profit 90%, Board assessment 100%), leading to reduced annual bonus payout for CEO versus FY2024 .
- Clawback/Anti-Hedging: Robust recoupment and anti-hedging policies; pledging prohibited for insiders, strengthening alignment .
Related Party Transactions and Red Flags
- Related Parties: No reportable related person transactions in FY2025 .
- Hedging/Pledging: Prohibited by policy (alignment positive) .
- Section 16 Compliance: Three late reports noted (director Gillette, CIO Haddad, COO West); all others timely .
- Auditor Change: Freed Maxick dismissed post FY2025 audit; Deloitte engaged for FY2026; no disagreements or reportable events .
Investment Implications
- Alignment: Strong equity ownership (103,864 shares; 1.1%), ownership guidelines met, and stringent anti-hedging/pledging policies support long-term alignment .
- Near-Term Overhangs: PSU/RSU vesting schedules (2026–2027) and outstanding in-the-money options ($102k) could create periodic selling pressure around vesting windows, though windows are controlled by trading policies .
- Retention/Change-in-Control: Double-trigger CIC with 24 months salary continuation for CEO and full acceleration of equity provides retention during transactions but implies potential payout dilution under sale scenarios .
- Execution: Continued integration of Martin and automation initiatives are margin accretive; stabilization of Transcat Solutions is key to organic growth consistency .
- Governance: Separation of Chair/CEO, majority independent Board, and annual say-on-pay with strong historical support reduce governance risk .