Tracy Kennedy
About Tracy Kennedy
Tracy Kennedy is Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Treasurer of Air T, Inc., appointed interim CFO on September 3, 2024 and permanent CFO on October 16, 2024; she continues to serve as Chief Accounting Officer since October 2022. She is 35, holds an MBA from Wake Forest University School of Business, a BS in Accounting and Business Administration from Washington and Lee University, and is a CPA. Her background includes Deloitte audit (2011–2016) and finance/accounting roles in industry and consulting (2016–2018), followed by progressive leadership roles at Air T (Director of Accounting → Corporate Controller → Chief Accounting Officer → CFO). She has signed the company’s Section 302 CEO/CFO certifications and is responsible for disclosure controls and internal controls over financial reporting, underscoring her accountability for financial reporting quality.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Air T, Inc. | Chief Financial Officer; Principal Financial Officer and Principal Accounting Officer; Treasurer | Interim effective Sep 3, 2024; permanent appointment Oct 16, 2024 | Top finance executive overseeing SEC reporting, governance, risk management, cash flow, policies, and internal controls; leadership through growth phase per CEO announcement and responsibilities described in filings |
| Air T, Inc. | Chief Accounting Officer | Oct 2022 – Oct 2024 (continues as CAO alongside CFO role) | Led financial reporting, internal controls enhancement, governance, cash-flow management; built the accounting team |
| Air T, Inc. | Corporate Controller | Feb 2019 – Oct 2022 | Ran day-to-day accounting and maintained accurate books/reporting |
| Air T, Inc. | Director of Accounting | May 2018 – Feb 2019 | Department leadership/transition period in accounting |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Deloitte | Audit Senior | 2011 – 2016 | Big Four audit experience; foundation in GAAP/controls |
| Industry/Consulting (not specified) | Finance and Accounting roles | 2016 – 2018 | Practical finance and consulting experience prior to Air T |
Fixed Compensation
| Component | Terms | Source |
|---|---|---|
| Base Salary (Rate) | $270,000 per year | |
| Actual Salary Paid (FY ended Mar 31, 2025) | $117,346 | |
| Signing Bonus | $1,875, payable at or before next pay date | |
| Benefits | Eligible for standard company benefits and 401(k) | |
| PTO | 4 weeks vacation per year | |
| Relocation | Reimbursement (Charlotte → Minneapolis area) with tax gross-up; budget pre-approved by Compensation Committee | |
| Employment Type | At-will; Minnesota governing law and venue | |
| CEO/Public Statement on Appointment | Press release announcing appointment as CFO effective Oct 16, 2024 |
Performance Compensation
| Incentive Type | Metric/Determination | Target/Range | Actual/Payout Mechanics | Vesting/Timing | Source |
|---|---|---|---|---|---|
| Quarterly Cash Incentive | CEO-determined 1–5 performance rating (discretionary) | Rating 1: $0; 2: $5k–$20k (CEO discretion); 3: $27k; 4: $40k; 5: $55k+ (CEO discretion) | Each quarterly award is paid in six equal installments over subsequent quarters; company may pause payments if in significant financial distress | Installments begin the following quarter; must be employed and in good standing on payment dates (exceptions for death/disability/termination without cause with release) | |
| Discretionary/Annual Bonus | Based on company overall financial performance and subjective individual evaluation | Not formulaic | Reported as “bonus” due to subjectivity; Kennedy received $6,375 in FY2025 | Timing not specified beyond customary payroll | |
| Equity Option Awards | Granted under 2020 Omnibus Plan; vesting contingent on stock price “tranches” tested each June 30 | Option counts as of Jun 30, 2025: 17,500 underlying options for Kennedy | If market price fails to reach the exercise price during the 60 days before the testing date, 100% of that tranche expires; none of Kennedy’s options vested as of Jun 30, 2025 | Annual testing on June 30 with six price tranches per year |
Notably, the program does not disclose explicit financial KPIs (e.g., revenue growth, EBITDA, TSR percentile) for bonus determination; it relies on CEO discretion and rating tiers, which reduces pay-for-performance transparency. The company also reserves the right to pause incentive payments under financial distress, introducing additional uncertainty to realized pay.
Equity Ownership & Alignment
| Category | Details | Source |
|---|---|---|
| Beneficial Ownership (Non-derivative) | Form 3 indicates no non-derivative holdings reported in Table I at filing; derivative holdings disclosed | |
| Options Outstanding (as of Jun 30, 2025) | 17,500 underlying options allocated to Kennedy per proxy equity table | |
| Option Structure | Six price tranches per year; vest only if the stock trades at or above tranche exercise price during the 60-day window prior to June 30 testing date; otherwise, tranche expires | |
| Vesting Status | None of Kennedy’s options were vested as of June 30, 2025 | |
| Example Derivative Positions (Form 3) | Multiple 250-share option tranches; exercisable 06/30/2025, expire 06/30/2041; example strikes: $33.98, $36.78, $39.76, $42.93, $46.29 | |
| Pledging/Hedging | No pledging or hedging disclosure identified in cited proxy sections |
Employment Terms
| Term | Economics/Provision | Source |
|---|---|---|
| Start/Appointment | Interim CFO effective Sep 3, 2024; permanent CFO effective Oct 16, 2024 | |
| Severance (No Cause) | 6 months of base salary plus 1 month per year of employment, capped at 12 months; lump sum within 60 days, subject to 409A and release | |
| 280G Cutback | Severance reduced if needed to avoid “parachute payment” under IRC 280G | |
| COBRA | Up to 18 months continuation coverage at employee’s expense | |
| Non-Compete | 12 months post-employment (void if terminated without Cause), with non-solicitation and confidentiality | |
| Non-Disparagement | Mutual non-disparagement provisions | |
| Governing Law/Venue | Minnesota law; Hennepin County courts | |
| Expense Reimbursement | Reasonable business expenses per policy | |
| Installment/Forfeiture Conditions | Quarterly incentive installments require continued employment in good standing; exceptions for death/disability/termination without cause with release |
Compensation Summary (Recent)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| 2025 | 117,346 | 6,375 | — | 56,668 | — | — | 123,721 |
Kennedy’s annual base salary rate is $270,000 per the employment agreement and proxy description, which may differ from the partial-year salary shown above due to timing of appointment during FY2025.
Governance and Say-on-Pay Context
- The Compensation Committee (independent directors) sets executive compensation; objectives are modest pay levels with base salary, annual cash incentives, stock options, and benefits. Advisory Say‑on‑Pay vote held annually; the Board expects to consider vote outcomes in future decisions.
Performance & Track Record
- CFO Certifications: Kennedy executed Section 302 certifications on the company’s 10‑K (dated June 27, 2025) and 10‑Q (dated November 12, 2025), confirming responsibility for fair presentation, disclosure controls, and internal controls over financial reporting.
- Leadership Commentary: Company announcement credits Kennedy with building a reliable accounting team, navigating complex financial challenges, and optimizing resources during a period of significant growth.
Compensation Structure Analysis
- Cash vs. Equity Mix: For FY2025, realized compensation was primarily cash salary plus a modest cash bonus, with option award grant-date value of $56,668; the option plan is highly performance- and price-sensitive with no vest as of 6/30/25.
- Incentive Design: Quarterly cash incentive is rating-based and discretionary, with significant CEO discretion and the ability to pause payouts in distress, reducing line-of-sight to objective financial metrics.
- Equity Design and Selling Pressure: Price-tranche options that expire if thresholds are not met can limit near-term selling pressure (no vest unless price conditions met), but concentrate incentives around the annual June 30 testing window, potentially creating event-driven alignment.
- Severance Economics: Maximum of 12 months base salary (no explicit change-of-control multiplier) and 280G cutback suggest conservative severance relative to many small-cap peers.
Risk Indicators & Red Flags
- Clawbacks: No explicit compensation clawback policy referenced in the provided employment agreement excerpts beyond installment and pause features for quarterly incentives.
- Pledging/Hedging: No pledging disclosures identified in the cited proxy sections for Kennedy.
- Legal/Investigations: No proceedings or investigations specific to Kennedy identified in the cited materials. (Not disclosed in provided documents.)
Equity Ownership & Derivatives Detail (Section 16 Snapshot)
| Filing | Effective/Event Date | Security | Quantity/Notes | Terms |
|---|---|---|---|---|
| Form 3 (Initial Statement) | Event date 10/16/2024; filed 8/14/2025 | Options (examples) | 250-share tranches at strikes $33.98, $36.78, $39.76, $42.93, $46.29 | Exercisable 06/30/2025; Expire 06/30/2041; ownership form: Direct |
Proxy equity table shows 17,500 underlying options as of Jun 30, 2025, with zero vested; Form 3 provides representative tranches and terms but is not a full inventory of all 17,500 options in the excerpt shown.
Investment Implications
- Alignment and Retention: Kennedy’s equity is entirely performance-priced with annual June 30 price tests and none vested as of 6/30/25—this structure aligns incentives to medium-term stock price performance and may suppress near-term selling pressure; installment-based cash incentive payments further promote retention but add payment risk in downturns.
- Pay-for-Performance Transparency: The rating-based cash incentive lacks explicit financial KPIs and permits payment pauses under financial distress, weakening direct linkage to objective operating performance (e.g., EBITDA, FCF). Investors should monitor Compensation Committee disclosures and any evolution toward KPI-based plans.
- Event/Trading Signals: Watch the pre–June 30 window each year (60 days prior) for potential price/volume dynamics around tranche vesting tests; also monitor Section 16 filings (Forms 3/4/5) for new grants, vesting outcomes, and any sales.
- Governance/Downside Protections: Severance capped at 12 months with 280G cutback and a 12-month non-compete (except if terminated without cause) indicate moderate shareholder protections. The relocation gross-up is a minor shareholder-unfriendly element but not unusual for executive moves.