Kenneth C. Bockhorst
BADGER METERAbout Kenneth C. Bockhorst
Kenneth C. Bockhorst is Chairman, President and CEO of Badger Meter, Inc. (BMI). He joined BMI as COO in Oct 2017, became President in Apr 2018, CEO in 2019, and Chairman in 2020; he is not an independent director and currently age 52 with seven years of board tenure as of the 2025 proxy . Under his leadership, BMI’s TSR rose from $146.39 to $339.87 (value of $100 initial investment) over 2020–2024, with Net Income and EBITDA improving alongside, supported by execution on free cash flow conversion and ROIC targets in long-term incentives . He also serves as a director of Mirion Technologies, Inc. .
Financial performance context
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Revenues ($) | 425,544,000 | 505,198,000 | 565,568,000 | 703,592,000 | 826,558,000 |
| EBITDA ($) | 90,227,000* | 106,465,000* | 113,406,000* | 146,029,000* | 190,072,000* |
Values with asterisk retrieved from S&P Global.
Pay-versus-performance disclosures (company figures)
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| CEO “Compensation Actually Paid” ($) | 3,391,471 | 4,753,955 | 4,513,915 | 8,021,428 | 9,644,075 |
| Company TSR (value of $100) | 146.39 | 167.07 | 172.43 | 245.82 | 339.87 |
| Peer Group TSR (value of $100) | 117.56 | 145.80 | 116.77 | 139.82 | 171.52 |
| Net Income ($000s) | 49,343 | 60,884 | 66,496 | 92,598 | 124,942 |
| EBITDA ($000s) | 90,227 | 106,465 | 113,405 | 146,029 | 190,072 |
Recent operating commentary: Management highlighted “another quarter of record sales,” resilient demand and robust free cash flow (Q2’25 call) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Badger Meter, Inc. | COO → President → CEO → Chairman | COO Oct 2017; President Apr 2018; CEO 2019; Chairman 2020 | Unified strategy and execution; elevated to combined CEO/Chair; board leadership |
| Actuant (now Enerpac Tool Group) | Executive roles incl. EVP Energy segment | Six years (pre-2017) | Global operational and M&A experience leveraged at BMI |
| IDEX | Product management/operational leadership | Not disclosed | Industrial operations skillset |
| Eaton | Product/operations leadership | Not disclosed | Manufacturing and operations expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mirion Technologies, Inc. | Director | Current | Cross-industry perspective; Mirion added to BMI’s compensation peer group in 2024 |
Fixed Compensation
Summary Compensation (CEO)
| Year | Salary ($) | Stock Awards ($) | Annual Bonus ($) | LTIP Cash ($) | Change in Pension/Deferred Comp ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| 2022 | 675,000 | 1,380,249 | 968,220 | 804,752 | 34,012 | 78,611 | 3,940,844 |
| 2023 | 750,000 | 1,962,621 | 1,650,000 | — | 97,362 | 84,305 | 4,544,288 |
| 2024 | 830,000 | 2,235,842 | 1,826,000 | — | 103,034 | 89,701 | 5,084,577 |
Additional fixed pay details:
- 2024 base salary increase +11% for CEO (approved Nov 9, 2023) recognizing contributions to record results .
- 2024 target annual bonus: CEO 110% of base salary .
Performance Compensation
Annual Bonus Plan (2024)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($M) | 50% | 146.7 | 158.4 | 170.1 | 191.5 | 200% |
| Absolute Free Cash Flow ($M) | 50% | 95.0 | 106.0 | 116.0 | 142.2 | 200% |
- Blended payout for NEOs (incl. CEO) = 200% of target; no discretionary adjustments for 2024 .
Long-Term Incentive Plan (Design and 2024 Grants)
- Mix shifted to emphasize performance: 2024 CEO LTIP 75% PSUs / 25% RSAs; prior years 70%/30% .
- RSAs vest ratably over 3 years; PSUs cliff-vest after 3 years based on two metrics equally weighted: free cash flow conversion and ROIC; threshold 50%, target 100%, max 200% .
2024 CEO Awards (grant date 3/1/2024)
| Award | Shares/Units | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|
| RSAs | 3,495 | 558,921 | 3-year ratable |
| PSUs (Target/Max) | 10,486 / 20,972 | 1,676,921 | 3-year performance (FCF conversion, ROIC) |
LTIP Performance Shares Earned (2022–2024 performance period)
| Metric | Threshold (50%) | Target (100%) | Max (200%) | Actual | Result |
|---|---|---|---|---|---|
| Free Cash Flow Conversion (%) | 100.0 | 112.5 | 125.0 | 111.6 | < Target |
| ROIC (%) | 14.5 | 17.0 | 19.5 | 28.9 | > Max |
| Blended Vesting | — | — | — | — | 148.1% of target |
Vesting/realization activity (2024): CEO had 17,208 shares vest with value realized $2,774,838; no option exercises in 2024 .
Equity Ownership & Alignment
Beneficial ownership (as of Feb 28, 2025): 98,086 shares (0.3% of outstanding) .
Breakdown and outstanding awards
| Category | Amount | Notes |
|---|---|---|
| Directly held | 31,045 | Sole voting/investment power |
| ESSOP | 251 | Employee Savings & Stock Ownership Plan |
| Restricted stock (unvested) | 8,081 | RSAs outstanding |
| Options exercisable | 44,050 | See strikes/expirations below |
| PSUs vesting within 60 days | 14,659 | As of 2/28/2025 |
| Total beneficial | 98,086 | 0.3% of common stock |
Options detail (Dec 31, 2024)
| Tranche | Exercisable | Unexercisable | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| Grant 2018 | 10,540 | — | 48.20 | 3/2/2028 |
| Grant 2019 | 15,329 | — | 59.85 | 3/1/2029 |
| Grant 2020 | 14,544 | 3,637 | 63.04 | 3/6/2030 |
Alignment policies and guidelines
- Ownership guidelines: CEO ≥ 3x base salary; all executive officers met/exceeded or are within 6-year window (as of 12/31/2024) .
- Hedging/pledging prohibited; no margin accounts permitted for executives and directors .
- No option grants since March 2020 (reduces option overhang risk) .
Employment Terms
- No general employment contracts or severance outside change-in-control; severance protections apply only on a double-trigger CIC basis .
- CEO KEESA: 3x salary and annual incentive; additional three years of benefit coverage; actuarial equivalent of 3 years of additional retirement benefits; outplacement and financial planning; 280G “best-net” cutback; 6-month non-compete post-termination .
Potential payments if CIC exercised at 12/31/2024 (CEO)
| Component | Amount ($) |
|---|---|
| Salary and Incentives | 5,229,000 |
| Value of Unvested Options & Restricted Stock | 2,256,346 |
| Value of Unvested PSUs | 7,688,276 |
| Retirement Benefits | 143,056 |
| Welfare Benefits & Other | 110,401 |
| Total | 15,427,079 |
Clawback policy: Applies to annual bonus and long-term incentive plans; recoupment on restatement or specified misconduct/material breach events .
Board Governance
- Roles: Combined Chairman & CEO since Jan 2020; Board retains flexibility to modify structure; Lead Independent Director in place (Glen E. Tellock) with robust responsibilities (agenda collaboration, CEO evaluation, presiding at executive sessions) .
- Independence: All directors except Mr. Bockhorst are independent; CEO is not independent .
- Committees: CEO serves on none but attends all committee meetings; 2025 committee chairs: Audit (Xia Liu), Compensation (Todd A. Adams), Governance (Glen E. Tellock) .
- Board meeting attendance: 100% for all directors in 2024; closed sessions of independent directors after each regular meeting .
- Board tenure and demographics: Mr. Bockhorst tenure 7 years; age 52; one of nine directors .
- Director compensation: CEO receives no additional director pay; outside director pay includes cash retainer and equity, with 2025 increases to equity grant and chair fees; director ownership guidelines at 4x retainer; hedging/pledging prohibited .
Board service history
- Director since 2018; appointed Chairman effective Jan 1, 2020 via 8-K .
Committee roles (dual-role implications)
- Combined Chair/CEO can concentrate authority; BMI mitigates with a strong Lead Independent Director, fully independent committees, and executive sessions, which addresses independence concerns while preserving unified strategic leadership .
Shareholder votes and engagement
- Say-on-Pay 2024: ~92% approval ; 2025 Say-on-Pay approved (22,090,272 For; 1,917,168 Against; 71,902 Abstain) .
- Board and management conduct ongoing shareholder outreach; 2024 outreach covered investors holding ~35% of shares .
Compensation Structure Analysis
- Increased performance leverage: 2024 LTIP mix raised to 75% PSUs for CEO (from 70%) to strengthen pay-for-performance alignment .
- Cash vs equity mix: CEO 2024 annual bonus paid at 200% of target due to overachievement on Adjusted EBITDA and Absolute Free Cash Flow; strong equity orientation maintained with significant PSU weighting .
- Options largely legacy: No new option grants since Mar 2020; outstanding options vest 20%/year, 10-year life .
- Peer benchmarking: Compensation targeted at median of peers; 2024 peer group includes Mirion Technologies (where Bockhorst is a director), Zurn Elkay, Itron, Mueller, Watts Water, among others; WTW serves as independent consultant; no conflicts identified .
Risk Indicators & Red Flags
- Related party transactions: None reported for 2024 .
- Hedging/pledging: Prohibited (mitigates alignment risk) .
- Tax gross-ups: Not provided (shareholder-friendly) .
- Option repricing: Prohibited .
- Section 16(a) compliance: Company noted delayed Form 4 filings for PSU earn-out on Feb 6, 2024; subsequently filed Mar 6, 2024, including for Mr. Bockhorst .
Equity Ownership & Alignment (Detail)
Outstanding equity at 12/31/2024
| Type | Quantity | Market/Terms |
|---|---|---|
| Unvested RSAs | 8,081 | $1,714,142 market value at $212.12 |
| Unearned PSUs | 57,831 | $12,267,099 market value at $212.12; remaining performance periods reflected at max per proxy |
| Options | See option table above | Vesting 20%/yr; expirations 2028–2030 |
Ownership guidelines compliance and prohibitions detailed above .
Employment Terms (Additional)
- Non-compete: 6 months after termination under KEESA .
- CIC definition and “good reason”: Detailed multi-prong definitions; includes 25% beneficial ownership trigger, board composition changes, mergers, asset sales, relocation >35 miles, among others .
- Deferred compensation and supplemental retirement: CEO has non-qualified supplemental plan; present value $455,215 at 12/31/2024 .
Say-on-Pay & Shareholder Feedback
- Annual say-on-pay frequency; strong support in 2024 (~92%); 2025 proposal approved as noted above .
- 2024 outreach prompted governance refinements (e.g., clarity on board refreshment, outside board limits) .
Investment Implications
- Alignment: High performance leverage (PSUs weighted to FCF conversion and ROIC) and rigorous clawback favor alignment; hedging/pledging prohibitions reduce agency risk .
- Retention/CIC: Double-trigger KEESA with 3x salary+bonus for CEO provides stability through strategic events but creates a sizable CIC package ($15.4M at 12/31/2024); 280G “best-net” cutback mitigates excise tax inefficiency .
- Selling pressure: Annual RSA/PSU vesting cycles (notably March grants) and significant vesting activity (17,208 shares vested in 2024) can create periodic liquidity events; options are legacy with no new grants since 2020, limiting option-driven overhang .
- Performance track record: Multi-year TSR and profitability trends are favorable; 2024 bonuses paid at maximums reflect strong EBITDA/FCF execution; continued emphasis on ROIC and FCF conversion in LTIP should sustain cash discipline .
S&P Global disclaimer: EBITDA values in the first financial table were retrieved from S&P Global.