Gary E. Kramer
About Gary E. Kramer
Gary E. Kramer, age 45, is President and Chief Executive Officer of Barrett Business Services, Inc. (BBSI) and a director since May 27, 2020. He joined BBSI in 2016 as VP–Finance, served as CFO and Principal Accounting Officer until his appointment as CEO on March 5, 2020. He holds a B.S. in business administration (finance) from Rowan University and an MBA (accounting) from Drexel University. Under his tenure, BBSI’s total shareholder return (TSR) rose from $77 (value of $100 investment at 12/31/2019) to $207 by year-end 2024, alongside rising net income and gross billings. Board leadership is separated (independent Chair), and outside directors hold executive sessions without management, mitigating dual-role governance risk.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| BBSI | VP – Finance | Aug 1, 2016 – Mar 5, 2020 | Strengthened finance function ahead of CEO transition. |
| BBSI | CFO & Principal Accounting Officer | 2016 – Mar 5, 2020 | Oversaw financial reporting and capital allocation prior to CEO role. |
| BBSI | President & CEO | Mar 5, 2020 – present | Led growth initiatives, including fully insured benefits offering; improved TSR. |
| Chubb Limited | Senior leadership roles (Insurance) | 12 years, ending 2016 | Brought deep insurance underwriting/risk expertise to BBSI. |
External Roles
- No other public-company directorships disclosed for Kramer; he serves on BBSI’s board as a management director.
Fixed Compensation
Multi-year CEO compensation (as reported):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 782,304 | 814,115 | 847,115 |
| Bonus – Discretionary ($) | 197,500 | 205,750 | 171,200 |
| Stock Awards – RSUs/PSUs (Grant-date FV, $) | 2,049,915 | 1,926,165 | 2,318,580 |
| Stock Options (Grant-date FV, $) | — | — | — |
| Non-Equity Incentive Plan (Annual Cash Incentive, $) | 1,154,398 | 735,356 | 906,288 |
| All Other Compensation ($) | 33,287 | 106,230 | 74,229 |
| Total ($) | 4,217,404 | 3,787,616 | 4,317,412 |
Notes:
- 2024 base salary set at $856,000 effective Apr 1, 2024 (SCT reflects paid amount).
- Perquisites in 2024 included personal use of corporate aircraft ($49,393) and club dues; 401(k) company match $13,800.
Performance Compensation
Annual Cash Incentive (2024 design and outcomes)
- Structure: Target bonus 100% of base (CEO); 80% tied to corporate metrics; 20% discretionary for individual goals.
- Corporate metrics equally weighted: Gross billings growth, Net income, Gross margin %, Worksite employee adds.
- Discretionary: Full target payout approved for CEO based on strategic objectives execution (benefits rollout, technology, market expansion, controls).
| Metric | Target | Actual | Min | Max | Payout % |
|---|---|---|---|---|---|
| Gross billings growth | 8.20% | 7.92% | 5.70% | 11.50% | 91% |
| Net income ($) | 41,770,868 | 52,993,307 | 35,505,238 | 50,125,042 | 200% |
| Gross margin (% of gross billings) | 2.91% | 3.04% | 2.76% | 3.10% | 167% |
| Worksite employee adds | 20,636 | 19,435 | 17,541 | 24,763 | 71% |
- 2024 Annual Incentive paid to CEO: $906,288 (corporate metrics) plus $171,200 (discretionary).
Long-Term Equity Incentives (Design and 2024/2025 activity)
- RSUs: Annual RSU grant on Jul 1, 2024 valued at $1,497,978 (45,908 RSUs), vesting in four equal annual tranches starting Jul 1, 2025.
- PSUs (2024 grant): Target 50,125 shares granted Mar 13, 2024 (FV $749,118), tied 50/50 to 3-year cumulative gross billings and pre-tax net income (2024–2026). Payout range 0–200% with ±2.5% modifier per 1% over/under target (caps at 80–140% target levels).
- PSU (2022 grant outcome): For period ending Dec 31, 2024, achieved 122.2% of target overall; CEO received 80,239 shares on Feb 24, 2025.
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 357,132 shares (1.4% of 25,680,212 outstanding as of Apr 7, 2025). Includes 80,000 options exercisable within 60 days. |
| Options | 80,000 exercisable; 80,000 unexercisable at $20.55; unvested tranche vests 100% on Mar 28, 2026; expire Mar 28, 2028. |
| Unvested RSUs (examples) | 5,828 (vest 7/1/2025); 8,288 (7/1/2025); 4,088 (7/1/2026); 4,076 (7/1/2027); 3,416 (7/1/2028); 45,908 (vest 25% annually starting 7/1/2025); NDCP-matching 2,177 (vest 7/1/2029). Multi-tranche RSUs: 26,856 (50%/yr from 7/1/2025); 42,472 (33%/yr from 7/1/2025). |
| Unvested PSUs | Threshold share references outstanding at 12/31/2024: 27,560 (cycle ending 2025), 25,063 (cycle ending 2026). 2022 cycle paid 80,239 shares in 2/2025 (122.2% of target). |
| Ownership guidelines | Executives must hold ≥3x base salary; all executives met or are on track. |
| Hedging/pledging | Hedging prohibited; pledging prohibited absent prior approval; no pledges outstanding. |
| Trading plans | No director or executive adopted Rule 10b5-1 or non-Rule 10b5-1 plans in 2024. |
Vesting supply watch:
- 2025 vesting includes: single-tranche RSUs (5,828; 8,288) plus first tranches of 26,856 (13,428) and 42,472 (≈14,157) and 25% of 45,908 (11,477), potentially increasing selling liquidity needs around Jul 1, 2025.
Employment Terms
| Term | Key Economics/Terms |
|---|---|
| Employment agreement | Effective Mar 5, 2020; term to Jul 1, 2025 with automatic 1-year renewals unless either party gives ≥90 days’ non-renewal notice. |
| Non-compete / Non-solicit | 18-month non-compete and non-solicit post-termination (CEO); 12 months for other NEOs. |
| Severance (no CIC) | 1.5x (salary + target bonus) cash; RSU acceleration for 1.5x the number scheduled to vest within 12 months; at 12/31/2024 estimated: $2,568,000 cash + $3,466,577 RSU value; total $6,034,577. |
| CIC severance | 3x (salary + target bonus) cash if terminated from 3 months before to 24 months after CIC; single-trigger vesting of all RSUs/options upon CIC regardless of termination; 280G cutback to avoid excise tax. At 12/31/2024: $5,136,000 cash + $8,049,419 equity; total $13,185,419. |
| Death/Disability | Lump-sum death benefit $2,000,000; all unvested RSUs/options vest at death/disability. |
| Clawback | Dodd-Frank-compliant clawback adopted Oct 2023; recovers incentive comp following accounting restatements (3-year lookback). |
| Deferred comp | Executive contributed $217,000 in 2024; balance $1,419,384 at 12/31/2024; NDCP RSU “match” 35% of deferrals up to $75,000/year, RSUs cliff-vest at 5 years. |
Board Governance
- Role: Management director; not listed as independent (all other named directors except Kramer are independent per Nasdaq rules).
- Structure: Independent Chairman (Anthony Meeker); Vice Chairman (Joseph Clabby); CEO and Chair roles separated; outside directors meet in executive sessions at least twice annually without management.
- Committees: CEO is not shown as a member of Audit & Compliance, Compensation, Nominating & Governance, or Risk Management Committees. Chairs: Audit (Cusick), Compensation (Price), Nominating (Carley), Risk (Moradi).
- Meetings/attendance: The Board met 7 times in 2024; each director attended at least 93% of applicable meetings.
- Director compensation: Employee directors do not receive director fees.
Performance & Track Record
Pay vs Performance (selected indicators)
| Year | TSR – Value of $100 Investment | Net Income ($000s) | Gross Billings ($000s) |
|---|---|---|---|
| 2020 | 77 | 33,765 | 5,924,539 |
| 2021 | 79 | 38,079 | 6,569,986 |
| 2022 | 109 | 47,268 | 7,393,808 |
| 2023 | 137 | 50,612 | 7,716,152 |
| 2024 | 207 | 52,993 | 8,327,091 |
- Say-on-pay support: >93% approval at 2024 annual meeting, indicating strong shareholder endorsement of pay design.
Revenues, EBITDA, Net Income (FY 2020–FY 2024)
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Revenues ($) | 880,824,000* | 955,166,000* | 1,054,326,000* | 1,069,307,000* | 1,144,531,000* |
| EBITDA ($) | 39,591,000* | 47,049,000* | 62,403,000* | 64,260,000* | 63,482,000* |
| Net Income ($) | 33,765,000* | 38,079,000* | 47,268,000* | 50,612,000* | 52,993,000* |
Values retrieved from S&P Global.*
Compensation Structure Analysis
- Mix and leverage: CEO total comp in 2024 ($4.32M) is equity-heavy with material RSU/PSU grants and variable annual incentive tied to objective financials (net income maxed at 200% payout), reinforcing pay-for-performance alignment.
- Metric rigor: Balanced scorecard (gross billings growth, net income, gross margin %, WSE adds) with 25% minimum thresholds and 200% caps; PSU design uses multi-year cumulative gross billings and pre-tax net income with non-linear modifiers (±2.5% per 1% variance).
- Governance safeguards: Clawback policy, anti-hedging, pledging restrictions, no excise tax gross-ups (cutback approach), and strong say-on-pay support reduce governance red flags.
- Discretionary element: 20% of annual bonus is discretionary; for 2024, full payout approved based on strategic execution.
Risk Indicators & Red Flags
- CIC equity vesting: Single-trigger equity vesting on change-in-control (all options/RSUs vest regardless of termination) can be shareholder-unfriendly and amplify deal-related pay outcomes; mitigated by 280G cutback and independent board structure.
- Perquisites: Limited but includes personal aircraft use ($49,393 in 2024).
- Trading/pledging: No hedging or pledging; no 10b5-1 plans adopted in 2024.
- Section 16: Timely filings in 2024 except one late Form 4 by a director (not the CEO).
Board Governance (Director Service Detail for Kramer)
- Board service: Director since 2020; not chair; no committee roles disclosed for Kramer.
- Independence: Not independent as CEO; independent Chair and Vice Chair provide counterbalance; outside directors meet in executive session.
- Attendance: Board met 7 times in 2024; directors achieved ≥93% attendance.
- Director pay: As a management director, Kramer does not receive board retainers/equity granted to non-employee directors.
Employment & Contracts (Key Provisions)
- Term/renewal: Automatically extends annually absent notice; stabilizes leadership continuity.
- Severance (no CIC): 1.5x salary+target bonus plus accelerated RSUs scheduled (1.5x) within 12 months; estimated total $6.0M at 12/31/2024.
- CIC: 3x salary+target bonus and single-trigger equity vesting; estimated total $13.2M at 12/31/2024; 280G cutback applies.
- Post-termination: 18-month non-compete/non-solicit; death benefit $2.0M; disability/death accelerate equity.
Investment Implications
- Alignment and upside leverage: Significant equity exposure (357k shares, 1.4%) and PSU design tied to multi-year value drivers support alignment; strong TSR progression and net income growth under Kramer suggest effective execution of strategic initiatives.
- Retention vs supply dynamics: Robust severance, 18-month non-compete, and NDCP usage reduce near-term flight risk; however, material RSU tranches vest annually (notably July 1), and options vest in 2026, creating periodic potential selling pressure; no pledging or hedging limits downside behavior.
- M&A incentives: Single-trigger equity vesting at CIC magnifies deal sensitivity; 3x CIC cash multiple is market-competitive but can be value-dilutive if not aligned with premium outcomes; mitigated by independent board leadership and say-on-pay support.
- Governance quality: Clawback policy, anti-hedging, strong committee independence, and high say-on-pay support indicate low governance overhang risk.