VOXX International Corp (NASDAQ:VOXX), a leading distributor in electronic parts and equipment with a market capitalization of $165 million, announced amendments to its executive compensation agreements on Monday, as per a recent SEC filing. The company’s stock has shown remarkable momentum with a 164% surge over the past six months, though InvestingPro data indicates current challenges in profitability. The changes, effective December 31, 2024, involve the employment contracts of CEO Patrick M. Lavelle, Senior V.P., CFO and COO Loriann Shelton, and Sr. V.P./Treasurer Charles M. Stoehr.
The adjustments are designed to ensure compliance with Section 409A of the Internal Revenue Code, which pertains to nonqualified deferred compensation. The company’s disclosure, set to be attached to its upcoming Form 10-Q report for the fiscal quarter ending November 30, 2024, outlines the specifics of the amended agreements. According to InvestingPro analysis, VOXX maintains a healthy liquidity position with a current ratio of 2.1, though its overall financial health score suggests some concerns that may influence executive compensation structures.
Lavelle’s fifth amendment to his employment contract includes a severance payment of $2 million, payable over two years if he is terminated without cause or resigns for good reason, including within 180 days after a Change of Control Event. Should his employment end due to the expiration of his contract on February 28, 2026, he is entitled to $1 million in severance, paid monthly over two years. In cases of disability or death, a $2 million severance would be paid either in monthly installments over two years or as a lump sum, respectively.
Shelton’s sixth amendment removes the implementation of the ERP system as a condition for her Extraordinary Bonus of $300,000, which is now solely contingent on the absence of a Change of Control Event. Her Change in Control Event Closing Bonus of $550,000 is now explicitly linked to her continued employment through the closing of such an event. Additionally, her severance payment structure has reverted to twelve monthly installments following termination without cause or resignation for good reason.
Stoehr’s fourth amendment aligns with the same Section 409A compliance, specifying that severance payments will begin on the sixtieth day post-termination, including all arrears up to that date, provided a release is executed and effective before then.
These amendments reflect VOXX International’s commitment to maintaining clear and compliant executive compensation practices. The information is based on a press release statement and indicates the company’s proactive approach to governance and fiscal responsibility. With the company’s next earnings report due in 6 days, InvestingPro subscribers can access additional insights through comprehensive Pro Research Reports, which provide deep-dive analysis of VOXX’s financial health, valuation metrics, and future prospects among 1,400+ US stocks covered.
In other recent news, VOXX International Corp has made significant strides in its financial restructuring. The company reported a substantial decrease in its total debt, from over $73 million to under $20 million, in its fiscal 2025 second quarter earnings call. This reduction was achieved through strategic asset sales, generating $48 million in gross proceeds. Despite a sales decline, the company’s consumer segment generated $4.6 million in pretax income, indicating improved profitability.
In addition to its financial restructuring, VOXX International has extended the employment agreements for CEO/President Patrick M. Lavelle and Senior V.P., CFO, and COO Loriann Shelton through February 28, 2026. The amendments to the contracts, effective from November 11, 2024, include provisions for additional compensation in the event of a change in control.
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