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UFP Technologies Inc. (NASDAQ:UFPT), a company specializing in surgical and medical instruments, announced on Tuesday significant changes in their executive compensation structure following a recent meeting of their Compensation Committee. The company, which has delivered an impressive 33% return over the past year and maintains a "GREAT" financial health rating according to InvestingPro, announced adjustments to base salaries and stock unit awards, effective January 1, 2025.
The company’s Chief Executive Officer and Chairman, R. Jeffrey Bailly, saw his base salary increase to $789,000. Other executive officers, including President Mitchell C. Rock and Senior Vice President, Treasurer and Chief Financial Officer Ronald J. Lataille, received increases to $525,000 and $485,000, respectively. These salary changes, coming at a time when the company maintains strong profitability with a 28.3% gross margin and revenue growth of 18.5% in the last twelve months, reflect the management team’s success in driving business performance.
Furthermore, the Compensation Committee approved stock unit awards for the executive officers, which are contingent on the company meeting certain financial performance objectives. These awards are structured to vest over a three-year period starting from March 1, 2026, assuming continuous employment and achievement of performance targets.
CEO R. Jeffrey Bailly was granted 11,515 "Threshold" stock units, 5,758 " Target (NYSE:TGT)" stock units, and 5,758 "Exceptional" stock units, with other executives receiving varying amounts. These stock units convert into shares of common stock but do not confer shareholder rights until vested.
In addition to these stock units, Mr. Bailly is eligible for a 2025 cash bonus plan with a target bonus of $828,450, potentially doubling based on the achievement of specific performance targets and goals.
The Compensation Committee also set forth a cash bonus plan for other named executive officers, with targets ranging from 40% to 65% of their base salaries. The final bonus amounts will depend on the company’s financial performance and individual contributions, as evaluated by the committee.
These compensatory arrangements aim to incentivize the executives to drive UFP Technologies forward, aligning their interests with the company’s financial success. With analyst price targets ranging from $370 to $392, according to InvestingPro, the company appears positioned for continued growth. This announcement reflects the company’s commitment to rewarding its leadership for their contributions to corporate growth, supported by strong fundamentals including a healthy current ratio of 2.57 and moderate debt levels.
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