Kevin McDearis
BLACKBAUDAbout Kevin McDearis
Kevin R. McDearis is Executive Vice President and Chief Technology Officer (CTO) at Blackbaud (BLKB). He has served as a named executive officer since January 1, 2021 and as CTO at least since fiscal 2022, with compensation predominantly delivered via performance-based restricted stock units tied to Non-GAAP revenue, income from operations, gross dollar retention, and Rule of 40 goals . Company performance in 2024 included total revenue of $1,155.5M (+4.5% YoY) and a Rule of 40 of 38.6%, while compensation decisions were influenced by TSR and the EVERFI divestiture, leading to discretionary reductions in STI payouts for NEOs .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Blackbaud | EVP & Chief Products Officer | 2021 | NEO role with equity incentives (STI/LTI PRSUs) aligned to company performance |
| Blackbaud | EVP & Chief Technology Officer | 2022–present | Technology leadership with pay-for-performance structure (STI based on Non-GAAP Adjusted Recurring Revenue and Income from Operations; LTI based on revenue/retention and Rule of 40) |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $449,123 | $463,894 | $475,018 |
| All Other Compensation ($) | $13,460 | $20,365 | $15,137 |
Notes: Base salary was unchanged YoY between 2023 and 2024 per compensation policy review; McDearis’ base salary was $475,000 in 2024 (no change vs 2023) .
Performance Compensation
2024 Short-Term Incentive (STI) PRSUs
| Item | Non-GAAP Adjusted Recurring Revenue | Non-GAAP Adjusted Income from Operations | Payout and vesting |
|---|---|---|---|
| Target | $1,157.0M | $327.0M | Company-level payout factor 91.1%; Compensation Committee used discretion to lower McDearis’ payout to 80.0% of target; earned STI PRSUs vested Feb 22, 2025 |
| Actual | $1,123.8M (97.1% of target) | $317.1M (97.0% of target) | McDearis: Granted 4,400 PRSUs; Earned 3,520 PRSUs (80%) |
2024 LTI One-year PRSUs (equally weighted metrics)
| Metric | Threshold | Target | Maximum | Actual | Performance factor | Vesting |
|---|---|---|---|---|---|---|
| Non-GAAP Adjusted Total Revenue | $1,064.7M | $1,183.0M | $1,301.3M | $1,150.1M (97.2% of target) | ~91.6% | Earned shares vest in 3 equal annual installments starting first anniversary of grant |
| Gross Dollar Retention | 88.3% | 91.3% | 93.3% | 89.5% (98.0% of target) | ~91.0% | Earned shares vest in 3 equal annual installments starting first anniversary of grant |
| McDearis grant/earn | Granted: 7,374 PRSUs | — | — | Earned: 6,735 PRSUs | Company earn-rate 91.3% | Same vesting as above |
2024 LTI Three-year PRSUs (Rule of 40, measured annually across 2024–2026)
| Year metric | Threshold | Target | Maximum | Actual | Earned % | McDearis earned | Vesting |
|---|---|---|---|---|---|---|---|
| Rule of 40 (2024) | 36.0% | 40.0% | 44.0% | 38.6% (96.4% of target) | 94.2% | 2,316 PRSUs | Vested on Feb 21, 2025; remaining 2025/2026 tranches TBD |
Prior-year Three-year PRSUs earned on 2024 performance
| Grant Year | Performance Period | Target % | Actual Achievement | Payout % | McDearis earned PRSUs | Vesting timing |
|---|---|---|---|---|---|---|
| 2023 | 2024 | 36.0% | 38.8% | 135.5% | 4,059 | Vested Feb 18, 2025 |
| 2022 | 2024 | 36.0% | 39.2% | 157.3% | 4,204 | Vested Feb 24, 2025 |
Equity Grants and Vesting Detail
2024 Grants of Plan-Based Awards (McDearis)
| Grant | Date | Instrument | Threshold (#) | Target (#) | Maximum (#) | Grant date fair value ($) |
|---|---|---|---|---|---|---|
| RSAs/RSUs | 2/21/2024 | Time-based RSAs/RSUs | — | 14,748 | — | $998,882 |
| LTI PRSUs (one-year) | 2/21/2024 | Performance RSUs | 3,687 | 7,374 | 14,748 | $499,441 |
| LTI PRSUs (three-year) | 2/21/2024 | Performance RSUs | 3,687 | 7,374 | 14,748 | $499,441 |
| STI PRSUs | 2/22/2024 | Performance RSUs | 2,200 | 4,400 | 8,800 | $297,792 |
Vesting schedule highlights: RSAs/RSUs vest in three equal annual installments beginning on the first anniversary of grant; earned one-year LTI PRSUs also vest in three equal annual installments; earned 2024 three-year PRSUs vested on Feb 21, 2025; STI PRSUs earned in 2024 vested Feb 22, 2025 .
Outstanding Equity at FY2024 Year-end (as of Dec 31, 2024; market value at $73.92/share)
| Grant | Unvested shares (#) | Market value ($) | Unearned PRSUs eligible (#) | Market/payout value ($) |
|---|---|---|---|---|
| 2/22/2024 STI PRSUs (earned) | 3,520 | $260,198 | — | — |
| 2/21/2024 RSAs/RSUs | 14,748 | $1,090,172 | — | — |
| 2/21/2024 LTI One-year PRSUs (earned) | 6,735 | $497,851 | — | — |
| 2/21/2024 LTI Three-year PRSUs (earned by 2024 Rule of 40) | 2,316 | $171,199 | 4,916 (2025/2026 target tranches) | $363,391 |
| 2/13/2023 RSAs/RSUs | 11,982 | $885,709 | — | — |
| 2/13/2023 LTI One-year PRSUs (earned) | 5,879 | $434,576 | — | — |
| 2/13/2023 LTI Three-year PRSUs (2024 earned) | 4,059 | $300,041 | 5,992 (max eligible 2025 performance) | $442,929 |
| 2/24/2022 RSAs/RSUs | 5,344 | $395,028 | — | — |
| 2/24/2022 LTI One-year PRSUs (earned) | 2,857 | $211,189 | — | — |
| 2/24/2022 LTI Three-year PRSUs (2024 earned) | 4,204 | $310,760 | — | — |
Stock vested in 2024: McDearis acquired 52,572 shares on vesting, realizing $3,885,861 in value (market value at vest date) .
Company does not grant stock options; no option awards outstanding .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Apr 14, 2025) | 74,805 shares; less than 1% of outstanding |
| Ownership guidelines | Officers must hold the lesser of 2x base salary in shares or 20,000 shares; McDearis owned 57,813 shares vs 20,000 minimum, achieving 4x of guideline (as of Dec 31, 2024) |
| Pledging/hedging | Company policy prohibits pledging and hedging of company securities |
| Options | Company does not grant options to NEOs |
Employment Terms
| Provision | Key terms |
|---|---|
| Employment agreement | At-will; no severance; IP assignment; one-year non-compete and non-solicit of employees/customers after termination |
| Retention agreement (CoC) | Double-trigger: if terminated without cause or for good reason within 12 months post-change-in-control, pays 1.5x base salary; accelerates and fully vests unvested equity (PRSUs with incomplete performance are paid at 100% of target); COBRA reimbursement up to 12 months |
| Definitions | “Cause” and “Good Reason” defined in agreement; includes material diminution of duties/compensation, relocation >40 miles, etc. |
| Change-in-control definition | Merger/consolidation resulting in pre-deal holders owning <50% post-deal, sale of substantially all assets, >50% beneficial ownership acquisition, liquidation/dissolution |
| Clawback | Compensation recovery provisions apply |
| 280G excise tax | Cutback provision to avoid Section 4999 excise tax unless not economically optimal for executive |
| Deferred comp/pensions | No deferred compensation, defined benefit pension, or supplemental retirement plans for executive officers |
Quantified Potential Payments (assuming event on Dec 31, 2024; stock price $73.92)
| Scenario | Base salary ($) | Lump sum bonus ($) | Equity acceleration ($) | Benefits ($) | Total ($) |
|---|---|---|---|---|---|
| Termination upon death or disability | — | — | $4,921,865 | — | $4,921,865 |
| Termination upon change in control | $712,500 | — | $5,067,068 | $16,268 | $5,795,836 |
Compensation Structure Notes
- 2024 total reported compensation for McDearis: Salary $475,018; Stock awards $2,295,556; All other $15,137; Total $2,785,711 .
- Target STI opportunity increased to 75% of base salary for McDearis in 2024; CEO remained at 100% .
- 2024 STI grants and payouts: McDearis granted 4,400 PRSUs and earned 3,520 (80% after discretionary reduction) .
- 2024 LTI PRSUs design: 50% time-based RSAs/RSUs and 50% PRSUs; one-year PRSUs earned at ~91.3% and three-year PRSUs earned at 94.2% for the 2024 period .
Risk Indicators & Red Flags
- Section 16(a) delinquent reports: McDearis filed a Form 4 on Feb 16, 2024 reporting acquisition of PRSUs on Feb 13, 2024; listed among exceptions in the company’s delinquent Section 16(a) disclosure .
- No tax gross-up on severance; 280G cutback to avoid excise tax .
- Prohibition on pledging/hedging; equity plan prohibits stock option exchanges or repricing without stockholder approval .
Compensation Peer Group and Say-on-Pay
- 2024 compensation peer group used for pay-versus-performance and benchmarking included ACI Worldwide, Box, Commvault, E2open, Elastic, Envestnet, Fair Isaac, Guidewire, Informatica, Manhattan Associates, Pegasystems, PowerSchool, SolarWinds, Tyler Technologies, Verint .
- Say-on-Pay support: Approximately 95% of votes approved 2023 NEO compensation at the June 12, 2024 meeting; the committee maintained the 2025 program and continued shareholder engagement .
Investment Implications
- Alignment: McDearis’ pay is highly equity-based and tied to Rule of 40, Non-GAAP revenue, income from operations, and retention metrics, with meaningful earned PRSUs and time-based RSUs that vest over multiple years—supporting continued retention and alignment with improving profitability and growth .
- Retention risk: Double-trigger CoC protection (1.5x salary, full equity acceleration at target for incomplete performance) reduces exit risk in a transaction; ongoing unvested RSUs/PRSUs and retirement vesting features further incentivize tenure .
- Trading signals: 52,572 shares vested in 2024 with $3.89M realized value, which can create periodic selling pressure from net-share tax settlements; Section 16 delinquency in 2024 is a minor governance flag but does not indicate improper trading .
- Governance: Strong policies—no options/repricing, no pledging/hedging, clawback provisions, and high say-on-pay approval—mitigate pay-risk and support investor confidence .