John H. Batten
About John H. Batten
John H. Batten, age 60, is President and Chief Executive Officer of Twin Disc, and has served as a director since December 2002; he joined the company in 1996 and progressed through senior operating roles before becoming CEO in May 2019 and being renamed President & CEO in October 2022 . Under his tenure, FY2025 net sales rose 15.5% to $340.7 million, though Twin Disc recorded a net loss of $1.9 million; the three-year performance stock program (ROIC and cumulative EBITDA) vested at 166.2% of target based on achieving 6.40% average ROIC and $86.17 million cumulative EBITDA . The company’s pay-versus-performance TSR measure shows a value of $100.67 for FY2025 (vs. $133.26 in FY2024 and $126.09 in FY2023) on a hypothetical $100 investment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Twin Disc | Application Engineer | 1996–1998 | Entry into engineered products and marine applications |
| Twin Disc | Commercial Manager – Marine | 1998–2001 | Customer-facing growth in marine products |
| Twin Disc | VP & GM – Marine Products | 2001–2004 | Expanded product leadership and operations |
| Twin Disc | Executive Vice President | 2004–2008 | Corporate leadership and global operations |
| Twin Disc | President & COO | 2008–2013 | Operational execution in complex manufacturing |
| Twin Disc | President & CEO | 2013–2019 | Strategic and organizational development |
| Twin Disc | Chief Executive Officer | May 2019–Oct 2022 | CEO of public company |
| Twin Disc | President & CEO (renamed) | Oct 2022–Present | Continued strategic and operating oversight |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No other public company directorships disclosed within past five years . |
Fixed Compensation
| Metric | FY 2024 | FY 2025 |
|---|---|---|
| Base Salary ($) | $676,746 | $704,698 (4% increase effective Oct 1, 2024) |
| All Other Compensation ($) | $163,048 | $177,106 |
| SERP above-market earnings ($) | — | $ (included in Nonqualified Deferred Compensation Earnings note: 4.6% credited) |
| Perquisites detail | Aircraft use: n/a disclosed | Personal use of company plane $26,986; long-term disability premiums; total perqs $29,073 |
Performance Compensation
Annual Incentive (CIP) – FY2025 design and outcome
| Metric | Weight | Target | Actual | % Achieved | Payout vs Target (CEO) |
|---|---|---|---|---|---|
| Net Sales | 20% | $336,000,000 | $340,738,000 | 113.9% | Included in 81.9% overall payout |
| EBITDA % of Net Sales | 40% | 10.0% | 9.28% | 64.0% | Included in 81.9% overall payout |
| Inventory % of Net Sales | 20% | 37.8% | 41.0% | 65.8% | Included in 81.9% overall payout |
| Strategic Objective – Corporate Growth | 10% | 100% | 100% | 100% | Included in 81.9% overall payout |
| Strategic Objective – Individual | 10% | Not specified | Not specified | Not specified | Included in 81.9% overall payout |
Additional CIP parameters:
- FY2025 target bonus % of base salary: CEO 85%
- FY2026 target bonus %: CEO 100% (design includes net sales, EBITDA %, inventory %, growth/individual objectives)
Long-Term Incentives (LTI) – structure and vesting
| Program | Metric | Weight | Performance Range | Achieved (201/22–2024/25 3-yr) | Payout |
|---|---|---|---|---|---|
| 2022 grant (vested in FY2025) | Average ROIC | 50% | 50%–200% of target | 6.40% (max achieved vs 6.0% max hurdle) | Contributed to 166.2% overall vesting |
| 2022 grant (vested in FY2025) | Cumulative EBITDA | 50% | 50%–200% of target | $86,170,000 (above $70,000,000 target) | Contributed to 166.2% overall vesting |
| FY2026 LTI design | Average ROIC & Cumulative EBITDA | 50% each | 50%–200% of target | Ongoing | Grants awarded |
FY2025 Equity Grants – CEO
| Award Type | Grant Date | Target / Granted | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| Performance Stock | 8/1/2024 | 45,711 target shares | $620,298 (based on $13.57/share) | 3-yr, scheduled 6/30/2027 |
| Restricted Stock Units | 8/1/2024 | 30,474 RSUs | $413,532 (based on $13.57/share) | 8/1/2027; dividend equivalents paid upon vesting |
| FY2025 Non-Equity Incentive (Cash) | FY2025 | $495,610 | — | Paid per CIP outcomes |
Equity Ownership & Alignment
| Ownership Detail | Amount | Notes |
|---|---|---|
| Total beneficial ownership (CEO) | 2,623,764 shares; 18.2% of class | Includes trustee/guardian holdings and unvested grants |
| Shares held as trustee/guardian | 2,058,692 shares (voting power) | Held under various family trusts/guardian arrangements |
| Unvested restricted stock (8/3/2023) | 32,933 shares | Scheduled vest after 3 years (FY2026) |
| Unvested restricted stock (8/3/2022) | 48,251 shares | Scheduled vest after 3 years (FY2025) |
| Unvested RSUs (8/1/2024) | 30,474 units | Vests 8/1/2027; dividend equivalents upon vest |
| Performance stock – unearned (8/3/2023) | 98,798 shares (shown at max) | Scheduled to vest 6/30/2026 |
| Performance stock – unearned (8/1/2024) | 91,422 shares (shown at max) | Scheduled to vest 6/30/2027 |
| Options outstanding | None | — |
Alignment policies:
- Stock ownership guideline: CEO required to hold 5× base salary; 4 years to attain; monitored annually .
- Anti-hedging and pledging: Executives and directors prohibited from hedging, short sales, margin accounts, and pledging company stock .
- Trading windows/pre-clearance: Designated insiders may trade only in windows and with pre-clearance .
Compliance note:
- Section 16(a): Forms 4 filed Aug 6, 2024 omitted RSUs initially; subsequently amended to include RSU awards .
Employment Terms
| Provision | CEO Terms |
|---|---|
| Change-in-Control Severance | 2.5× base salary plus the greater of prior-year bonus or target bonus; 24 months fringe benefits continuation; designed to avoid 280G excise tax gross-ups |
| Trigger for equity vesting under CIC | Double trigger required; upon CIC followed by qualifying termination, performance awards vest at maximum (target for certain post-11/1/2021 cases), restricted shares become nonforfeitable, RSUs vest and deliver |
| Retirement/Death/Disability equity treatment | Retirement: performance awards prorated and paid if objectives achieved; Death/Disability: performance awards vest at maximum (or target, depending on plan vintage), pro rata based on employment during performance period |
| Clawback | Mandatory clawback policy adopted Oct 1, 2023 for erroneously awarded incentive comp on accounting restatements; SEC/Nasdaq-compliant |
| Non-compete / Non-solicit | Not disclosed in proxy/10-K; skip. |
Board Governance
- Board service: Director since December 2002; continuing nominee and elected director in FY2025 slate .
- Leadership structure: CEO and Chairman roles are separated (Chairman: Michael C. Smiley); Chairman presides over independent director executive sessions and liaises with management/shareholders .
- Independence: Majority independent; independent directors include Doar, Johnson, Olsen, Smiley, Giesselman, Larimer .
- Committees and membership (non-employee directors only): Audit (Johnson—Chair; Giesselman; Larimer; Olsen); Compensation & Human Capital (Giesselman—Chair; Doar; Larimer); Nominating & Governance (Doar—Chair; Johnson; Olsen) .
- Attendance: Board met nine times in FY2025; all directors attended ≥75% of board and committee meetings; Audit met 5x, Compensation & Human Capital 3x, Nominating & Governance 2x .
Director compensation framework (non-employee directors):
- Annual retainer: cash + restricted shares; chairs receive additional fees ($20,000 Audit; $15,000 Compensation; $10,000 Governance); Chairman fee $54,000; stock ownership guideline 3× retainer over five years . The director compensation table covers non-employee directors and does not include Mr. Batten .
Performance Compensation Details
| Item | FY 2024 | FY 2025 |
|---|---|---|
| Stock Awards (aggregate grant-date fair value) ($) | $1,052,203 | $1,033,830 |
| Non-Equity Incentive Plan Compensation ($) | $674,516 | $495,610 |
| Total Compensation ($) | $2,566,513 | $2,411,245 |
Compensation philosophy and governance:
- Pay-for-performance with market median cash (base + annual incentive) and 50th–75th percentile LTI positioning; heavy use of equity (performance stock, RS/RSUs); no option repricing; clawbacks; double-trigger CIC; independent consultant engaged (Pay Governance LLC) in FY2025 .
Performance & Track Record
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Net Sales ($000s) | — | $295,127 | $340,738 |
| Net Income ($000s) | $10,380 (per PVP table) | $10,988 | $(1,894) |
| TSR – Value of $100 Investment | $126.09 | $133.26 | $100.67 |
| Six-month backlog ($mm) (as of June 30) | — | $133.7 | $150.5 |
Strategic initiatives and portfolio:
- Acquisitions: Katsa (May 31, 2024) and Kobelt (Feb 14, 2025), expanding propulsion, gearboxes, controls; contributed $44.0 million revenue in FY2025 .
- Segment dynamics: Strong Veth propulsion growth; mixed demand in European marine and China oil & gas; ME&A expenses reflect integration and stock compensation .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval |
|---|---|
| 2024 (Oct 31, 2024) | >90% votes cast in favor; Committee made no significant changes for FY2026 |
Compensation Committee Analysis
- Independence: Committee comprised solely of independent directors; charter reviewed Jan 29, 2025; authority to retain independent advisers .
- Consultant: Pay Governance LLC engaged to review competitive levels and structure in FY2025 .
- Risk oversight: Formal clawback policies; annual risk evaluation; caps on bonuses; multiple metrics; ownership guidelines .
Related Party Transactions
- Timothy Batten (brother of CEO) serves as Executive Vice President; total compensation approx. $518,000 (FY2025) and $503,000 (FY2024); arrangement described as consistent with peers; participates in standard benefit plans .
Equity Vesting & Insider Selling Pressure
| Upcoming Vestings (CEO) | Shares/Units | Date |
|---|---|---|
| Performance Stock (2023 grant at max) | 98,798 | 6/30/2026 |
| Performance Stock (2024 grant at max) | 91,422 | 6/30/2027 |
| RSUs (2024 grant) | 30,474 | 8/1/2027 |
| Restricted Stock (2023 grant) | 32,933 | 3-year vest ending FY2026 |
- Trades by executives are restricted to pre-cleared trading windows; hedging, short sales, margin accounts, and pledging are prohibited, reducing forced-sale risk from margin calls and misaligned hedging .
Investment Implications
- Alignment: Batten holds a significant stake (18.2% beneficial ownership), is subject to strict anti-hedging/pledging rules, and CEO ownership guideline of 5× salary, indicating strong alignment with shareholders .
- Incentives: Annual incentives focus on sales, EBITDA margin, inventory efficiency, and strategic goals; LTI is tied to ROIC and cumulative EBITDA with 50–200% payout ranges—supportive of returns-focused execution but can produce high payouts when aggregate metrics outperform (166.2% vesting in FY2025) .
- Liquidity/pressure: Material vesting events in FY2026–FY2027 may increase potential tradable shares; the insider trading policy mitigates opportunistic selling risk, but investors should watch Form 4 activity around windows/vestings .
- Downside/risks: FY2025 net loss and weaker TSR vs prior years, integration risks from Katsa/Kobelt, and related-party executive presence represent watch items; however, governance practices (separated Chair/CEO, independent committees, clawbacks, no 280G gross-ups) are supportive .