Stephen H. Kramer
BRIGHT HORIZONS FAMILY SOLUTIONSAbout Stephen H. Kramer
Stephen H. Kramer, 54, is Chief Executive Officer and President of Bright Horizons (since Jan 2018 CEO; President since Jan 2016) and a director since 2018. He joined Bright Horizons in 2006 via the acquisition of College Coach, which he co‑founded and led for eight years; prior roles at Bright Horizons include Managing Director, Europe (2008–2009), SVP Strategic Growth & Global Operations (2010–2013), and Chief Development Officer (2014–2016) . 2024 performance highlights under his leadership included 11% revenue growth YoY, with segments contributing approximately $2.0B Full Service Center‑Based Child Care, $610M Back‑Up Care, and $114M Educational Advisory Services . One-, three-, and five-year TSRs as of 12/31/2024 were 17.61%, -4.16%, and -5.92%, respectively, versus the Russell 3000 and Russell Midcap Growth benchmarks .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bright Horizons | Managing Director, Europe | 2008–2009 | Led international operations during European expansion |
| Bright Horizons | SVP, Strategic Growth & Global Operations | 2010–2013 | Drove global operations and strategic growth initiatives |
| Bright Horizons | Chief Development Officer | 2014–2016 | Led development, preceding elevation to President |
| Bright Horizons | President | 2016–present | Company-wide leadership of strategy and execution |
| Bright Horizons | Chief Executive Officer & Director | 2018–present | Overall strategy and operating performance |
| College Coach (acquired) | Co‑Founder & Leader | ~1998–2006 | Built asset acquired by BFAM; entry point to company |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Public company directorships | Director | Current count: 1 | Current public company directorships (including Bright Horizons): 1 |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 509,232 | 650,000 | 672,750 |
| Target Annual Bonus (% of salary) | — | 145% | 145% |
| Director Fees for Board Service | Not applicable (no additional comp as CEO-director) | Not applicable | Not applicable |
Notes: 2024 salaries for NEOs increased 3.5% YoY; Mr. Kramer’s base rose from $650,000 to $672,750 (+3.5%) . In Feb 2023, the Compensation Committee increased CEO base to $650,000 and LTIP target to $3.5M to better align with market trends .
Performance Compensation
2024 Annual Cash Bonus Structure and Outcome
| Component | Weight | Target | Actual | Payout |
|---|---|---|---|---|
| Adjusted EBITDA (non-GAAP) | 25% | $421.9M | $409.29M | 76.0% of target (sliding scale) |
| Adjusted EPS (non-GAAP) | 25% | $3.45 | $3.47 | 104.0% of target |
| Corporate Subtotal | 50% | — | — | 47.5% of 50% weight |
| Individual Performance | 50% | Qualitative goals | Assessment | 100% of 50% weight |
| Committee Adjustment | — | — | +2.5% adjustment to align with Home Team payout | Applied |
| Actual Bonus Paid (as % of salary) | — | — | — | 145% (CEO) |
Bonus metrics were equally weighted Adjusted EBITDA and Adjusted EPS (corporate 50%), plus 50% individual goals; payouts are capped at 3x for the corporate portion . Non-GAAP definitions and reconciliation references are provided in the 10‑K .
Long-Term Equity Incentive Program (LTIP) Design
- Mix: 50% RSUs (3‑year cliff), 25% PRSUs (3‑year cliff; based on 3‑year average annual Adjusted EBITDA growth; 0–200% payout), 25% stock options (3‑year ratable, 10‑year term since 2023) .
- 2024 CEO Grant Details:
- Target values: RSU $1,750,000; PRSU $875,000; Options $875,000 .
- Granted: 15,132 RSUs; 7,566 PRSUs; 17,043 options .
- Option strike: fair market value on grant; vesting 1/3 annually over 3 years; 10‑year term .
| 2024 LTIP Grants (CEO) | Grant Value ($) | Quantity |
|---|---|---|
| PRSUs | 875,000 | 7,566 |
| RSUs | 1,750,000 | 15,132 |
| Stock Options | 875,000 | 17,043 |
Multi-Year Reported Compensation (Summary Compensation Table)
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 509,232 | 650,000 | 672,750 |
| Bonus (annual plan – individual portion) | 369,193 | 471,250 | 487,744 |
| Stock Awards (FASB ASC 718) | 1,210,814 | 2,624,987 | 2,625,024 |
| Option Awards (FASB ASC 718) | 1,089,389 | 874,997 | 874,988 |
| Non‑Equity Incentive Plan Comp (corporate portion) | 73,839 | 299,715 | 487,744 |
| All Other Compensation | 6,424 | 6,865 | 6,013 |
| Total | 3,258,891 | 4,927,814 | 5,154,263 |
Equity Ownership & Alignment
Beneficial Ownership and Policy Alignment
- Beneficial ownership (4/10/2025): 126,524 shares; includes 52,398 shares via exercisable options; excludes unvested RSUs/PRSUs noted below .
- Shares outstanding (record date 4/10/2025): 57,378,107 .
- Ownership as % of shares outstanding: ~0.22% (126,524 / 57,378,107; derived from cited figures) .
- Stock ownership guidelines: CEO required ≥5x salary; as of 12/31/2024 the CEO met/exceeded guidelines .
- Anti‑hedging/anti‑pledging: Policy prohibits hedging and pledging by directors and officers .
- Clawback: NYSE/SEC‑compliant clawback policy in place for erroneously awarded incentive comp upon restatement .
Vesting Schedules (as of 12/31/2024; CEO)
| Instrument | Quantity | Vesting/Terms |
|---|---|---|
| Purchased Restricted Stock | 18,800 | Outstanding at 12/31/2024 |
| RSUs | 22,439 | Vest 2/24/2026 (cliff) |
| RSUs | 15,132 | Vest 3/4/2027 (cliff) |
| RSUs | 13,440 | Vest 3/5/2028 (cliff) |
| PRSUs (target) | 11,219 | 3‑year avg Adjusted EBITDA growth; vest 2/24/2026 |
| PRSUs (target) | 7,566 | 3‑year avg Adjusted EBITDA growth; vest 3/4/2027 |
| PRSUs (target) | 6,720 | 3‑year avg Adjusted EBITDA growth; vest 3/5/2028 |
Outstanding Options (CEO)
| Exercisable | Unexercisable | Strike ($) | Grant Date | Expiry |
|---|---|---|---|---|
| 15,250 | — | 122.44 | 2/25/2019 | 2/25/2026 |
| — | 23,750 | 128.81 | 2/25/2022 | 2/25/2029 |
| 8,637 | 17,537 | 77.99 | 2/24/2023 | 2/24/2033 |
| — | 17,043 | 115.65 | 3/4/2024 | 3/4/2034 |
2024 Option Exercise Activity (CEO)
- Options net‑settled: 17,080; company withheld 14,400 shares to cover taxes/exercise; 2,680 shares delivered; value realized on exercise: $700,963 .
Employment Terms
Severance and Change-of-Control (CoC) Economics
| Scenario | Cash Severance | Bonus/Pro‑rata | Equity Acceleration | Benefits |
|---|---|---|---|---|
| Termination without cause/for good reason within 24 months after CoC | Up to 2 years of base salary + cash bonus comp equal to prior two years (bi-weekly) | Pro‑rated bonus for year of termination | Immediate vesting: Options; RSUs/PRSUs: if >2 years employed, 100% at CoC (PRSUs at target); if <2 years, 100% vesting only upon termination within 12 months post‑CoC (PRSUs at target) | Company pays medical premiums up to 24 months or cash equivalent |
| Termination without cause/for good reason outside CoC window | 1 year of base salary (bi‑weekly) | Pro‑rated bonus for year of termination | Standard award terms (no CoC acceleration) | Standard benefits per plan |
Additional terms: Payments subject to compliance with restrictive covenants; equity awards follow plan/award agreements; no tax gross‑ups .
Board Governance
Role, Independence, and Structure
- Board service: Director since 2018; CEO and President; not independent under NYSE rules .
- Committees: None (standing committees are fully independent) .
- Leadership structure: Independent Chair (David H. Lissy) separate from CEO; executive sessions led by an independent presiding director (Jordan Hitch) .
- Attendance: In 2024, all directors attended 100% of Board and committee meetings on which they served .
- Delegation: Compensation Committee authorized CEO (within parameters) to grant equity awards as plan administrator delegate .
- Director compensation: CEO receives no additional fees for Board service .
Performance & Track Record
| Metric | 2024 Result |
|---|---|
| Revenue growth YoY | 11% |
| Segment revenue mix | ~$2.0B Full Service Center‑Based Child Care; $610M Back‑Up Care; >$114M Educational Advisory Services |
| TSR (as of 12/31/2024) | 1‑yr: 17.61%; 3‑yr: -4.16%; 5‑yr: -5.92% |
Compensation Structure Analysis (alignment signals)
- Pay‑for‑performance: 50% of annual bonus tied to corporate metrics (Adjusted EBITDA and Adjusted EPS), 50% to individual goals; corporate portion payout capped at 3x; PRSUs tied to multi‑year Adjusted EBITDA growth with 0–200% payout .
- Mix shift to performance equity: 2023 LTIP added PRSUs; CEO LTIP target increased in 2023 to align with market; maintained in 2024 .
- Governance safeguards: Clawback policy compliant with NYSE/SEC; anti‑hedging/anti‑pledging; no option repricing without shareholder approval; no tax gross‑ups .
- Ownership alignment: CEO subject to 5x salary ownership guideline and in compliance as of 12/31/2024 .
- Shareholder support: Say‑on‑pay approval ~94% at 2024 Annual Meeting, signaling investor endorsement of program design .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited for directors and officers (mitigates misalignment) .
- Option repricing: Prohibited without shareholder approval .
- Related parties: No reportable related person transactions in 2024 .
- Say‑on‑pay: Strong approval (~94%) reduces compensation controversy risk .
Equity Ownership Detail (as of 4/10/2025; select items)
| Item | Amount |
|---|---|
| Beneficially owned shares | 126,524 |
| Exercisable options included | 52,398 |
| Unvested RSUs (future vest) | 22,439 (2/24/2026); 15,132 (3/4/2027); 13,440 (3/5/2028) |
| Unvested PRSUs (target) | 11,219 (2/24/2026); 7,566 (3/4/2027); 6,720 (3/5/2028) |
| Shares pledged | Prohibited by policy |
| Ownership guideline | CEO ≥5x salary; in compliance as of 12/31/2024 |
Employment Terms (additional)
- Timing of awards: Long‑term incentive grants made on a set schedule and not timed around MNPI; no backdating; detailed grant timing policy disclosed .
- Non‑compete/non‑solicit: Severance conditioned on compliance with restrictive covenants (specific durations not disclosed) .
Board Governance (director‑specific)
| Topic | Detail |
|---|---|
| Committees | CEO is not a member of the standing committees; committees are fully independent |
| Independence | CEO is not independent; all other directors (except CEO) are independent under NYSE rules |
| Attendance | 100% Board/committee attendance in 2024 |
| Leadership | Independent Chair separated from CEO; independent presiding director leads executive sessions |
| Director pay | CEO receives no additional director compensation |
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay: ~94% approval at 2024 Annual Meeting; Compensation Committee retained 2025 program approach given support .
- Shareholder engagement: Off‑season outreach to shareholders representing >50% of shares; discussions included executive compensation; feedback reviewed by Board committees .
Employment & Contracts (summary)
| Item | Terms |
|---|---|
| Severance (no CoC) | 12 months base salary; pro‑rated bonus for year of termination |
| Severance (within 24 months post‑CoC) | Up to 2 years base salary + prior two years’ cash bonus comp (bi‑weekly); pro‑rated bonus; benefits continuation up to 24 months |
| Equity on CoC | Options vest immediately; RSUs/PRSUs: if >2 years employed, 100% vest at CoC (PRSUs at target); if <2 years, 100% vest upon qualifying termination within 12 months post‑CoC (PRSUs at target) |
| Clawback | Mandatory recovery policy compliant with NYSE/SEC |
| Hedging/Pledging | Prohibited |
Investment Implications
- Alignment and retention: High at‑risk mix (PRSUs/RSUs/options) tied to multi‑year Adjusted EBITDA growth and annual Adjusted EBITDA/EPS supports pay‑for‑performance; strong ownership guidelines and compliance, plus anti‑hedging/pledging and clawback, reinforce alignment and risk control .
- Vesting overhang and supply: Significant scheduled RSU/PRSU cliffs in 2026–2028 and option vesting through 2034 may create periodic settlement‑related supply; 2024 option net settlement indicates use of shares to cover taxes/exercise but not open‑market selling by CEO for that event .
- CoC economics: Mix of single‑trigger equity vesting (for >2 years of service) and double‑trigger within 12 months post‑CoC, plus up to 2 years of cash severance post‑CoC, are market‑typical; absence of tax gross‑ups lowers shareholder‑unfriendly optics .
- Performance context: 2024 delivered 11% revenue growth with balanced segment contributions; one‑year TSR improved but 3‑ and 5‑year TSRs remain negative, framing execution risk and multi‑year recovery dependence despite incentive design .