Mueller Water Products, Inc. (NYSE:MWA), a $3.87 billion market cap player in the fabrication of metal products with an impressive 74.51% year-to-date return, has announced changes to the employment agreement of its CEO, Marietta Edmunds Zakas, as per the latest 8-K filing with the SEC.
According to InvestingPro analysis, the company currently appears to be trading slightly above its Fair Value. The adjustments, effective December 9, 2024, modify certain severance benefits and follow the company's previous agreement from August 21, 2023.
With this amendment, Zakas has relinquished her right to full severance benefits under certain conditions not related to a Change-in-Control, as defined in her Executive Change-in-Control Severance Agreement dated September 30, 2018. The revised terms now stipulate that these severance benefits will only be applicable following a Change-in-Control of the company.
Despite these changes, Zakas will maintain her current compensation structure. This includes an annual base salary of at least $900,000, a target annual bonus of no less than 110% of her base salary, and a target annual long-term incentive opportunity of no less than 333% of her base salary. The company's strong financial position is evidenced by its GREAT Financial Health Score from InvestingPro, with liquid assets exceeding short-term obligations by a factor of 3.33x.
Additionally, she is entitled to a severance multiple of three in the event of a Qualifying Termination, as well as a severance payment equal to 300% of her current base salary upon termination without "cause" or resignation for "good reason."
Furthermore, the CEO will continue to receive a monthly car allowance of $2,000 and reimbursement for financial planning expenses in line with the company's executive financial planning policy. In the event of retirement, death, disability, or termination by the company without "cause" or by Zakas for "good reason," she will be eligible for a prorated annual bonus based on actual performance, COBRA continuation coverage for up to 18 months, monthly payments of 150% of the applicable COBRA rate, and continued group life insurance coverage for 24 months.
This news comes directly from the SEC filing and provides investors with the latest contractual arrangements between Mueller Water Products and its CEO, ensuring transparency regarding executive compensation and severance terms. Looking ahead, three analysts have revised their earnings upwards for the upcoming period, with the company maintaining its 19-year track record of consistent dividend payments.
For deeper insights into Mueller Water Products' financial health and future prospects, including access to the comprehensive Pro Research Report and 13 additional ProTips, visit InvestingPro.
In other recent news, Mueller Water Products reported record earnings for fiscal year 2024, with fourth-quarter net sales climbing to $348.2 million, a 15.5% year-over-year increase. For the full year, the company's consolidated net sales surpassed $1.3 billion, driven by robust demand and enhanced customer service. Adjusted net income per share reached a record high of $0.96, up 52% from the previous year. Additionally, the company's adjusted EBITDA for the quarter grew significantly by 30.9% to $72.5 million.
In terms of recent developments, TD (TSX:TD) Cowen raised the price target on Mueller Water Products' shares to $23.00, up from the previous $20.00, while maintaining a Hold rating on the stock. This adjustment comes as a reflection of the sector's multiples, according to TD Cowen's analysis.
Despite a reported $16.3 million non-cash goodwill impairment and increased warranty expenses, the company's fiscal 2025 projections include consolidated net sales between $1.34 billion and $1.36 billion, and adjusted EBITDA between $300 million and $305 million.
The firm's EBITDA estimate for fiscal year 2025 for Mueller Water Products is slightly lower compared to the previous model due to a lower than anticipated initial growth guide provided by the company.
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