8-K: Mativ Holdings Appoints Shruti Singhal as President and CEO, Replacing Julie Schertell

Shruti Singhal, a current Mativ director, has been appointed as President and CEO, succeeding Julie Schertell, effective March 11, 2025.

Summary

• Mativ Holdings, Inc. has appointed Shruti Singhal as its new President and Chief Executive Officer, effective March 11, 2025.
• Singhal succeeds Julie Schertell, who has stepped down from her role.
• Singhal will continue to serve on Mativ's Board of Directors.
• The company aims to accelerate execution, lower costs, improve cash flow, and reduce leverage.
• Mativ has launched a comprehensive review of its cost structure to identify further savings actions.
• Singhal's offer letter includes a monthly cash stipend of $110,000.
• He will also receive an equity award with a grant date value of $2,100,000, subject to a one-year cliff vesting requirement.
• Schertell's departure is treated as an involuntary termination without cause, entitling her to severance benefits.
• She will receive a prorated portion of her annual short term cash incentive bonus payable pursuant to the STIP that will be determined to be payable for calendar year 2025 based on actual performance attainment and prorated based on the Employees days of service during calendar year 2025 through the Separation Date as a one-time, lump-sum payment, less all applicable and legally required withholdings and deductions, to be paid out when bonuses are paid to similarly situated executives but no later than March 15, 2026.
• Schertell will receive severance in the amount of $4,360,200 as a one-time, lump-sum payment, less all applicable and legally required withholdings and deductions, to be paid within sixty (60) days following the Separation Date.
• Schertell will vest and settle with Employee: (i) 1,069 shares of time-based restricted stock units under the Mativ Holdings, Inc. 2015 Long-term Incentive Plan (2015 LTIP) granted on February 16, 2023, and (ii) 22,776 shares of time-based restricted stock units under the Mativ Holdings, Inc. 2024 Equity and Incentive Plan (2024 LTIP) granted on February 13, 2024, for a total of 23,845 shares of time-based restricted stock units constituting a prorated portion of her unvested time-based restricted stock unit award agreements under the 2015 LTIP and 2024 LTIP, subject to the terms and conditions of such plan and agreements.
• Schertell will vest and settle with Employee: (i) 26,102 shares of performance-based restricted stock units under the 2015 LTIP granted on February 16, 2023, and (ii) 53,805 shares of performance-based restricted stock units under the 2024 LTIP granted on February 13, 2024, for a total of 79,907 shares of performance-based restricted stock units constituting a prorated portion of her unvested performance-based restricted stock units award agreements under the 2015 LTIP and 2024 LTIP and based on average completed performance.
• Schertell will receive a one-time, lump-sum payment of $25,000, less all applicable and legally required withholdings and deductions, for professional outplacement services, to be paid within sixty (60) days following the Separation Date.
• Schertell will receive a lump-sum payment equal to the monthly premiums that Employee would be required to pay if she elected continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA) under the medical and dental plans of the Company in which the Employee was participating immediately before the Separation Date based upon the premium rates in effect as of the Separation Date, multiplied by twenty-four (24), to be paid within sixty (60) days following the Separation Date.
• Schertell will receive reasonable counsel fees, not to exceed $10,000, incurred in connection with the negotiation and documentation of this Agreement, and matters related hereto, payable within sixty (60) days following the Separation Date.
• The Board of Directors approved an amendment and restatement of the company's bylaws, eliminating temporary governance provisions.
• Mativ reduced non-operating costs by over $20 million in 2024.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While there's a change in leadership and a focus on improvement, the company acknowledges existing challenges. The new CEO's experience is a positive factor.

Positives

• The appointment of Shruti Singhal is expected to bring strong operational and commercial execution to Mativ.
• Singhal has a track record of driving strong financial and operating performance in global industrial organizations.
• The company is actively working to reduce its cost structure and improve profitability.
• Mativ has already achieved over $20 million in non-operating cost reductions in 2024.

Negatives

• Julie Schertell's departure may create uncertainty during the transition period.
• The company acknowledges the need to accelerate the pace of execution, indicating potential past shortcomings.
• The company recognizes the need to lower costs, improve cash flow and reduce leverage, indicating potential past shortcomings.

Risks

• The company's ability to successfully execute its turnaround strategy is subject to various risks and uncertainties.
• Failure to achieve the expected cost savings and operational improvements could negatively impact financial performance.
• The company's high leverage could limit its financial flexibility.
• The company's reliance on key personnel, including the new CEO, could pose a risk if they are unable to perform their duties effectively.

Future Outlook

Mativ aims to accelerate its turnaround efforts and position the company for improved results and sustainable value creation through continued execution of its strategy and driving operational excellence.

Management Comments

• Dr. Kimberly Ritrievi, Chair of the Board of Directors, stated that Shruti Singhal is the right person to drive the business forward with urgency and ensure the Company reaches its full potential.
• Shruti Singhal expressed excitement about leading Mativ and emphasized the focus on executing the strategy and driving operational excellence.
• Julie Schertell expressed pride in the team's accomplishments and believes Mativ is well-positioned to build on the momentum created.

Industry Context

The appointment of a new CEO with a background in leading business transformations suggests that Mativ is seeking to improve its operational and financial performance in a competitive specialty materials market.

Comparison to Industry Standards

• It is difficult to compare the results to industry standards without specific financial data and competitor analysis.
• However, the focus on cost reduction and operational excellence aligns with common strategies in the specialty materials industry to improve profitability and competitiveness.
• Companies like Ahlstrom-Munksjo and Schweitzer-Mauduit International (SWM) are key competitors in the specialty materials space, and their performance could be used as a benchmark for Mativ's progress.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders may be impacted by the change in leadership and the company's efforts to improve financial performance.
• Employees may be affected by the cost reduction initiatives and any potential organizational changes.
• Customers and suppliers may experience changes as Mativ focuses on operational excellence and strategic execution.

Next Steps

• Shruti Singhal will assume his role as President and CEO, focusing on executing the company's strategy and driving operational excellence.
• Mativ will continue its comprehensive review of its cost structure to identify further savings actions.
• The company will work to accelerate its turnaround efforts and improve financial performance.

Key Dates