Matthew O’Hayer
Vital FarmsAbout Matthew O’Hayer
Founder of Vital Farms and Executive Chairperson since April 2019; director since 2009. Age 69. Previously CEO from 2007–2019; founder and president of the Organic Egg Farmers of America (industry association). Governance: CEO and Chair roles are separated; Lead Independent Director is Denny Marie Post; O’Hayer is not independent due to his executive role .
Performance context: 2024 net revenue grew 28.5% to $606.3M; Adjusted EBITDA rose 79.2% to $86.7M (14.3% margin); gross profit $229.9M (37.9% margin). One-year 2024 TSR was 140.22%; company re-affirmed long-term targets to ~$1B revenue, 35% gross margin, and 12–14% Adjusted EBITDA margin by 2027 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Vital Farms | Chief Executive Officer | 2007–Apr 2019 | Built brand and supply network; scaled to national CPG; foundation for resilient growth . |
| Vital Farms | Executive Chairperson | Apr 2019–present | Oversees board; founder continuity; separation from CEO supports governance balance . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Organic Egg Farmers of America | Founder & President | Not disclosed | Industry convening on organic egg production; sector expertise signaling . |
Fixed Compensation
- Executive Chairperson pay-setting: The Nominating & Corporate Governance Committee determines compensation for the Executive Chairperson (and non‑employee directors). Specific 2024 compensation amounts for O’Hayer are not itemized in the proxy .
- Director fees: Employee directors (O’Hayer and the CEO) receive no additional director compensation .
- Stock Ownership Guidelines: Executive Chairperson expected to own ≥3x base salary; all officers and directors were in compliance as of the record date (options and unvested performance shares excluded) .
- Clawback: Board adopted an Incentive Compensation Recoupment Policy compliant with SEC/Nasdaq for restatement-related recovery of incentive pay .
- Hedging/pledging: Hedging prohibited; pledging allowed only with Board pre-approval and guardrails (e.g., max collateralized loan ≤25% LTV) .
Performance Compensation
Company program mechanics (NEO framework; O’Hayer-specific incentive details were not disclosed):
- Annual cash incentive (2024): 50% Net Revenue and 50% Adjusted EBITDA; payout curve 0–200% per metric. 2024 targets: $560.0M Net Revenue; $61.4M Adjusted EBITDA. Actuals: $606.3M Net Revenue (155.2% payout on that half), $86.7M Adj. EBITDA (200% payout on that half). Payout approved at 175% to share upside with plant crew members .
- Long-term equity (2024 grants to NEOs): 50% PSUs and 50% RSUs. PSUs cliff-vest after FY2026, based on FY2026 Net Revenue (50%) and Adjusted EBITDA Margin (50%) with 0–200% payout; specific FY2026 targets to be disclosed post-performance period. RSUs vest in three equal annual installments beginning 3/11/2025 .
Detailed 2024 STI outcome (company framework)
| Metric | Weight | Target | Actual | Payout |
|---|---|---|---|---|
| Net Revenue ($M) | 50% | 560.0 | 606.3 | 155.2% of half-target |
| Adjusted EBITDA ($M) | 50% | 61.4 | 86.7 | 200.0% of half-target |
| Approved total payout | — | — | — | 175% (vs 178% formula) |
PSU design (2024 grants; company framework)
| Metric (FY2026) | Weight | Threshold | Target | Max | Vesting Mechanic |
|---|---|---|---|---|---|
| Net Revenue | 50% | 50% vest | 100% vest | 200% vest | Linear interpolation; cliff vest post-FY2026 . |
| Adjusted EBITDA Margin | 50% | 50% vest | 100% vest | 200% vest | Linear interpolation; cliff vest post-FY2026 . |
Compensation peer group (benchmarking reference used by the Compensation Committee; examples): CELH, ELF, FRPT, COCO, SMPL, BYND, HNST, STKL, MGPI, NATR, LMNR, PETS, SMPL, ZVIA, NAPA (among others); FW Cook serves as independent consultant and was assessed for independence .
Equity Ownership & Alignment
| Item | Amount |
|---|---|
| Beneficial ownership (shares) | 8,000,569 . |
| Ownership (% of 44,497,590 shares o/s) | 17.9% . |
| Options included in beneficial ownership (exercisable within 60 days) | 321,292 . |
| Shares under O’Hayer’s voting control (held by Catherine Stewart per 13G/A) | 716,000 . |
| Shares pledged as loan collateral | 1,900,000 (Board-approved under Pledging Policy) . |
| Ownership guideline status | In compliance (Exec Chair ≥3x salary) . |
Notes
- Pledging risk: While permitted under policy with pre‑approval and limits, 1.9M pledged shares introduce potential forced‑sale risk under adverse market conditions; oversight by Nominating & Corporate Governance Committee and full Board is disclosed .
- Directors and officers are prohibited from hedging; Rule 10b5‑1 plans are permitted subject to policy .
Employment Terms
- Executive Chairperson employment economics: Specific base salary/bonus/equity terms for O’Hayer were not itemized in the 2025 proxy; his compensation is overseen by the Nominating & Corporate Governance Committee. As an employee director, he does not receive separate director retainers .
- Company-wide severance framework for comparison: CEO and NEOs have double‑trigger change‑in‑control protection with equity acceleration and salary/bonus multiples (e.g., CEO: 24 months’ salary + target bonus; others: 12 months + target bonus upon CIC termination), plus COBRA and option exercise extensions, illustrating the governance approach to executive retention. O’Hayer’s severance/CIC terms were not disclosed .
Board Governance (dual-role considerations)
- Structure: Separate CEO (Russell Diez‑Canseco) and Executive Chair (O’Hayer); Lead Independent Director in place; 6 of 8 directors are independent; all three standing committees (Audit, Compensation, Nominating & Corporate Governance) are fully independent and chaired by independents .
- Classified board with three classes; O’Hayer’s term expires 2026; board tenure limit policy (12 years for non‑employee directors) adopted in Nov 2024; overall board/committee attendance was 98% in 2024; independent directors held five executive sessions in 2024 .
- Committee oversight: N&CG oversees director/Exec Chair pay and pledging policy; Compensation Committee oversees executive pay and clawback; Audit Committee oversees financial reporting and related‑party transactions .
- Director pay environment (context): Non‑employee directors receive $60k annual retainer (as of Sept 30, 2024 policy), plus additional committee/leadership retainers, and equity grants ($110k annual RSU grant; $120k initial RSU). Employee directors (O’Hayer, CEO) receive no additional director pay .
Performance & Track Record
- 2024 highlights: Net revenue $606.3M (+28.5% y/y); gross margin 37.9%; Adjusted EBITDA $86.7M (+79.2% y/y; 14.3% margin). Added ~125 family farms (now >425), announced second Egg Central Station site (Seymour, IN), reinforcing scaling toward $1B revenue goal by 2027 .
- Pay-for-performance alignment: 2024 annual incentive paid at 175% based on above‑target revenue and EBITDA; long‑term PSUs tied to FY2026 revenue and EBITDA margin further align pay to multi‑year value creation .
Related-Party Transactions (governance red flags scan)
- A related‑party engagement involved the CEO’s father’s firm (Sandpebble) for project management related to facilities (paid ~$1.022M in FY2024), reviewed per policy. No O’Hayer-related transactions were disclosed .
- Officer exculpation amendment to charter proposed for stockholder approval, consistent with DGCL §102(b)(7) updates (does not cover loyalty/bad faith/derivative claims) .
Say-on-Pay & Shareholder Feedback
- The company’s first say‑on‑pay vote will be held at the 2025 annual meeting; Board recommends annual frequency going forward .
Compensation Committee Analysis (process quality)
- Membership (2024): Chair Gisel Ruiz; members Kelly J. Kennedy and Karl Khoury; all independent; uses FW Cook as independent consultant (independence affirmed). Annual risk assessment found no compensation‑related risks reasonably likely to have a material adverse effect .
Investment Implications
- Alignment strengths: Founder‑level ownership at 17.9% is a strong signal; Board/committee independence, a formal clawback, and performance‑weighted incentives (2024: 50% revenue, 50% EBITDA; PSUs tied to FY2026 revenue/margin) support pay‑for‑performance discipline as the company scales toward 2027 targets .
- Watchpoints (trading/retention risk): 1.9M pledged shares by O’Hayer introduce forced‑liquidation risk in stress scenarios; Board approval and monitoring mitigate but do not eliminate this overhang. Executive Chair compensation terms are not itemized, limiting transparency on specific retention levers and potential CIC economics for O’Hayer relative to NEOs .
- Governance quality: Separation of CEO/Chair, Lead Independent Director, high attendance, independent committees, tenure limits, and elimination of hedging collectively reduce dual‑role and entrenchment concerns; inaugural say‑on‑pay outcome in 2025 will be a useful sentiment check on pay design amid outsized 2024 TSR performance .