EL SEGUNDO, CA - Mattel Inc . (NASDAQ:MAT) has announced a significant performance-based stock award for CEO Ynon Kreiz, designed to incentivize his continued leadership and alignment with shareholder interests. The Compensation Committee of the toy manufacturer approved the one-time award on Monday, with the grant to be issued on September 30, 2024.
The award, valued at $15 million, consists of performance-based restricted stock units (RSUs) under the company's 2010 Equity and Long-Term Compensation Plan. Vesting is contingent upon achieving ambitious performance metrics over a five-year period, including substantial stock price growth and outperforming the S&P 500 index.
Kreiz's leadership has been credited with a transformational impact on Mattel, including significant financial improvements, market share gains, and successful IP-driven initiatives in entertainment.
Under his tenure, Mattel has seen robust revenue and earnings growth, increased market share in key product categories, and the launch of Mattel Films and Television Studios, which have contributed to the company's expanded entertainment offerings.
The RSUs will vest only if certain stock price and relative total shareholder return (TSR) targets are met. The stock price hurdles range from $27 to $40, representing up to a 48% increase from the award's approval date. Relative TSR performance will be measured against S&P 500 companies, with vesting thresholds set from the 55th to the 85th percentile.
Kreiz must remain with the company through September 30, 2029, to benefit from the grant, with provisions for accelerated vesting in certain cases of termination. No vesting will occur unless the stock price exceeds $27 per share, and the company's TSR meets or exceeds the 55th percentile compared to the S&P 500.
In other recent news, Mattel, Inc. experienced significant developments in its leadership team and financial performance. Jennifer Kettnich was appointed as Vice President of Investor Relations, while Ken Wee took on the role of Executive Vice President and Chief Strategy Officer.
Additionally, Sai Koorapati was named Senior Vice President and Chief Technology Officer. These appointments come alongside the company's Q2 2024 financial results, which showed a slight 1% decrease in net sales, but an increase in its adjusted gross margin to 49.2%.
Goldman Sachs (NYSE:GS) reaffirmed its Buy rating on Mattel, maintaining a steady price target of $22.00, following a review of the company's recent presentation. The company's management has expressed readiness to cater to value-seeking consumers through their variety of well-regarded brands.
InvestingPro Insights
As Mattel Inc. (NASDAQ:MAT) aligns its executive compensation with ambitious performance metrics, the company's financial health and market valuation come into focus. According to InvestingPro data, Mattel boasts a market capitalization of approximately $6.48 billion and a price-to-earnings (P/E) ratio of 20.46, which adjusts to 19.25 on a last twelve months basis as of Q2 2024. The P/E ratio is particularly noteworthy when considering the company's near-term earnings growth, positioning it favorably for investors seeking value.
Two InvestingPro Tips highlight the company's strategic financial maneuvers. Firstly, Mattel has a perfect Piotroski Score of 9, indicating a very strong financial position. Secondly, the company's management has been aggressively buying back shares, a move that often signals confidence in the company's future prospects and an attempt to increase shareholder value. Additionally, InvestingPro has many more tips available, which could provide deeper insights into Mattel's performance and potential (https://www.investing.com/pro/MAT).
These financial indicators and strategic actions could be seen as aligning with the performance-based incentives set for CEO Ynon Kreiz. Should the company continue on its current trajectory, the performance metrics set for Kreiz's stock award might well be within reach, potentially resulting in significant gains for shareholders who are patient and confident in the company's direction.
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