J. Michael Custer
WATSCOAbout J. Michael Custer
Independent director of Watsco since 2018; age 62; Lead Independent Director; Chair of the Nominating & Governance Committee; member of the Audit Committee. He leads the tax services practice at Kaufman Rossin (top‑100 U.S. accounting firm) with 30+ years advising across industries, bringing deep accounting, financial and tax expertise; designated an audit committee financial expert by the Board . Years of service as a non-management director: 7 as of the 2025 proxy .
Past Roles
| Organization | Role | Tenure | Committees / Impact |
|---|---|---|---|
| Kaufman Rossin | Leader, Tax Services Practice | 30+ years | Financial reporting, audit/accounting and tax expertise applied to WSO’s acquisition planning and long-term strategy |
External Roles
| Organization | Role | Public Company? | Committees |
|---|---|---|---|
| — | — | None disclosed | — |
The Board’s skills matrix does not indicate public company board service for Custer; no other public directorships are disclosed in the 2025 proxy .
Board Governance
- Independence: Affirmed independent under NYSE rules; also independent for Audit Committee service; designated audit committee financial expert .
- Lead Independent Director responsibilities: Sets meeting schedules with Chair, reviews agendas, presides over executive sessions of independent directors, facilitates board self-evaluations, available for direct shareholder communication .
- Attendance: Board held 4 meetings and committees met Audit (6), Compensation (6), Nominating & Governance (3), Strategy (1); all directors attended 100% of board and applicable committee meetings in 2024 .
- Election: Re-elected by Class B holders to 2028 term; votes for/against/abstain: 52,415,165 / 116,611 / 32,370; broker non-votes 1,100,747 .
- Controlled company status: Despite controlled status (53.6% combined voting power by insiders), WSO maintains majority-independent board and fully independent Compensation and Nominating & Governance Committees .
| Committee | Role | 2024 Meetings |
|---|---|---|
| Nominating & Governance | Chair | 3 |
| Audit | Member | 6 |
Fixed Compensation
| Component (FY2024) | Amount (USD) | Notes |
|---|---|---|
| Committee Chair Fee (Nominating & Governance) | $10,000 | Fee for service as Chair; no additional compensation for Lead Independent Director role |
| Option Awards | $0 | No new director options disclosed for 2024; options may be granted at Chairman’s discretion |
| Meeting Fees | — | Not disclosed |
| Annual Retainer | — | Not disclosed; director pay delivered “from time to time” via stock options at Chairman’s discretion |
Performance Compensation
| Metric | Target | Outcome | Payout Mechanism |
|---|---|---|---|
| None disclosed for directors | — | — | Board may award stock options at Chairman’s discretion; no performance metrics disclosed for director pay |
Other Directorships & Interlocks
| Type | Detail |
|---|---|
| Public company boards | None disclosed |
| Interlocks/conflicts | No compensation committee interlocks involving Custer in 2024; committee interlocks reviewed—none requiring disclosure |
| Related-party transactions | Audit Committee reviews/approves related-party transactions; 2024 disclosures highlight Greenberg Traurig (director Alvarez) — no transactions involving Custer disclosed |
Expertise & Qualifications
- Financial reporting, internal controls, corporate governance; audit/accounting/tax proficiency; designated audit committee financial expert .
- Leadership and management skills, acquisition-related insights, long-term planning experience .
- Skills matrix shows Custer in “Regulation,” “Social, Management, and Leadership,” “Financial Reporting and Internal Controls,” and “Corporate Governance” categories; 7 years board tenure .
Equity Ownership
| Item | Detail |
|---|---|
| Total beneficial ownership (Common) | 7,086 shares; includes 5,752 directly owned and 1,334 presently exercisable options |
| Ownership as % of outstanding | <1% (Common) as of April 4, 2025 |
| Options outstanding | 2,000 options; intrinsic value $193,880 at 12/31/2024 |
| Exercisable vs unexercisable | 1,334 exercisable; remaining unexercisable at record date |
| Pledging/hedging | Prohibited for directors and NEOs under Insider Trading and governance policies |
| Ownership guidelines | Directors must hold ≥$100,000 of WSO equity; all directors/NEOs compliant as of 12/31/2024 |
Governance Assessment
- Strengths: Independent status; Lead Independent Director role with robust responsibilities and direct shareholder access; audit committee financial expert designation; 100% attendance; transparent committee service; re-election with overwhelming shareholder support; hedging/pledging prohibited; director ownership guidelines met .
- Compensation alignment: Minimal fixed cash ($10k chair fee); director equity delivered via options at discretion—no tax gross-ups and no backdating/repricing; no extra pay for Lead Independent Director role, supporting independence and cost discipline .
- Conflicts: No related‑party transactions disclosed for Custer; Audit Committee pre-approves and monitors related-party transactions .
- Watch items: Controlled company structure persists, though mitigated by majority‑independent board and independent key committees; director options outstanding introduce potential for perceived alignment via equity, but absence of disclosed annual retainer/meeting fees reduces cash reliance .
Shareholder signals: Say‑on‑pay received strong combined support in 2025 (77.6M for vs 4.7M against) and meaningful combined support in 2024 (49% of Common in favor; 91% of combined votes cast) indicating investor acceptance of WSO’s compensation philosophy and governance framework .