The Eastern Company (NASDAQ:EML), a Connecticut-based manufacturer of industrial hardware, announced the departure of Chief Executive Officer Mark A. Hernandez and the appointment of Ryan Schroeder as the new CEO, effective this past Monday (NASDAQ:MNDY).
On November 4, 2024, Hernandez resigned from his position and from the Board of Directors, along with all other roles within the company and its affiliates. His departure is not the result of any disputes with the company, its board, or management. A separation agreement was established, entitling Hernandez to severance that includes his 2024 base salary of $530,500, a working capital bonus of $140,787, immediate vesting of certain restricted stock units, and additional compensation for unused vacation pay.
Ryan Schroeder, 48, steps into the role of CEO with a wealth of experience in the manufacturing sector. His previous roles include CEO of Plaskolite LLC and President, Americas for IMI (LON:IMI) Norgren, as well as various leadership positions at Parker Hannifin (NYSE:PH). Schroeder's selection was not influenced by any prior arrangements or understandings with other individuals, and he has no familial ties or material interests that would necessitate disclosure under SEC regulations.
Concurrent with his appointment, Schroeder entered an employment agreement with Eastern Co, which outlines the terms of his employment. The agreement includes an annual base salary of $475,000, eligibility for a Short Term Incentive Plan with a target of 75% of his base salary, and a similar target for long-term incentive compensation. Additionally, Schroeder has access to the company's benefit plans and is entitled to four weeks of vacation annually.
The employment agreement specifies that upon termination without cause, or resignation with good reason, Schroeder is to receive severance equivalent to one year's base salary, among other standard compensations. It also includes non-compete and non-solicitation clauses effective for 12 months post-employment, as well as provisions regarding confidentiality and work product.
InvestingPro Insights
The Eastern Company's recent leadership change comes at a time when the company is showing strong financial performance. According to InvestingPro data, EML has demonstrated impressive revenue growth, with a 14.96% increase in quarterly revenue as of Q3 2024. This growth is complemented by a robust EBITDA growth of 48.42% over the last twelve months, indicating improved operational efficiency.
InvestingPro Tips highlight EML's financial stability and shareholder-friendly policies. The company has maintained dividend payments for an impressive 54 consecutive years, showcasing its commitment to returning value to shareholders. This is further supported by a current dividend yield of 1.52%. Additionally, EML's liquid assets exceed short-term obligations, suggesting a strong balance sheet that provides financial flexibility for the new CEO to execute strategic initiatives.
Investors considering EML might be interested to know that InvestingPro offers 13 additional tips for this stock, providing a more comprehensive analysis for informed decision-making.
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