Kevin M. Fennell
About Kevin M. Fennell
Executive Vice President, Chief Financial Officer, and Treasurer of Broadstone Net Lease, Inc. since March 2023 (Treasurer added September 2024); age 39; joined BNL in 2019 after a decade in real estate corporate banking at BMO Capital Markets/BMO Harris Bank; B.S. in Finance (University of Illinois at Urbana‑Champaign). As CFO, he leads accounting, tax, internal audit, finance, capital markets, investor relations, and IT/IS, during a year BNL achieved record AFFO/share of $1.43 (+1.4% YoY), 99.1% occupancy, and reduced Net Debt/Annualized Adjusted EBITDAre to 5.0x . Company cumulative TSR since its 9/17/2020 IPO translated a $100 initial value to $127.50 at YE 2024 vs $143.91 for the MSCI US REIT index, while 2024 AFFO/share reached a post‑IPO high of $1.43 .
BNL performance context (annual):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues (USD) | 407,513,000 * | 442,888,000 * | 431,800,000 * |
| EBITDA (USD) | 343,556,000* | 375,042,000* | 365,044,000 * |
Values retrieved from S&P Global.
- S&P Global data (citations may not be available for all periods).
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Broadstone Net Lease, Inc. | SVP, Capital Markets & Credit Risk | 2019–Mar 2023 | Led capital markets/credit risk ahead of promotion to CFO; supported financing for growth pipeline . |
| BMO Capital Markets/BMO Harris Bank | Real Estate Corporate Banking (various roles) | 2009–2019 | Originated/underwrote debt to public/private REITs and operators; expertise in balance sheet/financing strategy . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed in the proxy | — | — | — |
Fixed Compensation
| Component | 2024 Detail |
|---|---|
| Base Salary | $375,000 (no increase vs 2023) . |
| Annual Bonus Target | 100% of base salary; threshold 50%, max 200% . |
| Actual 2024 Bonus Paid (Feb 2025) | $725,409 (near plan maximum outcome) . |
Performance Compensation
Annual cash incentive (2024):
| Metric | Weight | Threshold | Target | Max | Actual |
|---|---|---|---|---|---|
| AFFO per Share | 50% | $1.390 | $1.410 | $1.430 | $1.428 |
| Net Debt / Annualized Adjusted EBITDAre | 15% | 5.75x | 5.50x | 5.25x | 5.03x |
| Economic Occupancy | 10% | 97.0% | 98.0% | 99.0% | 99.1% |
| Structured Discretionary Scorecard | 25% | 78/130 | 104/130 | 130/130 | 124/130 (95% achievement) |
Long-term incentives (granted 2/28/2024 unless noted):
- Standard annual LTI mix: 40% time-based RS (4-year ratable vesting) and 60% performance-based RSUs (3-year rTSR), for CFO .
- 2024 awards to Fennell:
- Time-Based Restricted Stock: $300,000 (19,362 shares), vests 25% annually 2025–2028 .
- Performance RSUs (rTSR): $450,000 target (29,043 units); 50% vs net-lease peer group and 50% vs MSCI US REIT; payout 0–200%; performance period 2/28/2024–2/28/2027; if absolute TSR is negative, payouts reduced by 25% but not below target .
- One-time Retention Award: $1,250,000 (80,673 time-based RS), 5-year cliff vest on 2/28/2029, granted to retain senior leadership amid strategy transition .
Stock vested/settled in 2024:
| Executive | Shares Vested | Value Realized | Shares Withheld for Taxes |
|---|---|---|---|
| Kevin M. Fennell | 13,342 | $198,929 | 4,810 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/3/2025) | 173,429 shares of Common Stock (<1% of outstanding) . |
| Unvested Time-Based RS (12/31/2024) | 100,035 shares; market value $1,586,555 at $15.86 close . |
| Unvested Performance RSUs (12/31/2024) | 58,086 target units; market value $921,244 at $15.86 close (disclosure methodology) . |
| Scheduled Vesting (Time-Based) | 15,484 on 2/28/2026; 9,028 on 2/28/2027; 4,840 on 2/28/2028; 80,673 on 2/28/2029 (retention award) . |
| Ownership Guidelines | CFO must hold shares = 3x base salary; 50% of net after-tax shares retained until compliant; unvested time-based RS count, performance-based RSUs excluded . |
| Hedging/Pledging | Prohibited for employees/directors (no margining, pledging, short selling, or derivatives) . |
| Clawback | Dodd‑Frank/NYSE-compliant clawback adopted/amended October 2023; recovers incentive comp after material restatement (no misconduct requirement) . |
Employment Terms
| Provision | Detail |
|---|---|
| Agreement Type | Severance Protection Agreement (no long-form employment agreement) . |
| Term | Not specified; protection applies to qualifying terminations including around a CIC window . |
| Severance (No CIC) | 1.5x (base salary + then-current target bonus) lump sum; pro‑rated target bonus; 24 months employer portion COBRA; full vesting of time-based equity (subject to terms) . |
| Severance (CIC Window) | 2.0x (base salary + then-current target bonus) lump sum; pro‑rated target bonus; 24 months employer portion COBRA; equity treated per plan; double-trigger for assumed awards . |
| Death/Disability | Accrued benefits; pro‑rated target bonus; 12 months COBRA; time-based equity vests; pro‑rated PSUs based on actual performance . |
| 280G Treatment | Best‑net (pay full or cutback to avoid excise tax), whichever yields higher after-tax value; no excise tax gross‑up . |
| Restrictive Covenants | Standard short-form: confidentiality; non‑solicit of business relationships/employees; non‑disparagement during employment and 12 months post‑termination . |
Estimated payouts (as of 12/31/2024) under scenarios:
| Scenario | Cash Severance | Prorated Bonus | Benefits (COBRA) | Equity Acceleration | Total |
|---|---|---|---|---|---|
| Termination w/o Cause or for Good Reason (No CIC) | $1,500,000 | $375,000 | $45,681 | $2,013,935 | $3,559,616 |
| Death/Disability | — | $375,000 | $22,840 | $2,357,802 | $2,755,642 |
| Double‑Trigger CIC | $1,500,000 | $375,000 | $45,681 | $2,828,679 | $4,749,360 |
Compensation Structure Analysis
- Pay mix emphasizes at‑risk pay: CFO’s annual LTI is majority performance‑based (60% PSUs) with three‑year rTSR hurdles vs peers and MSCI US REIT; 2024 added a one‑time five‑year cliff retention RS award ($1.25M) to reinforce retention through 2029 .
- Annual bonus is highly formulaic: 75% based on objective metrics (AFFO/share, leverage, occupancy) and 25% on a structured strategic scorecard; 2024 outcomes were near max on objective metrics and 95% on the scorecard, yielding a $725,409 payout for Fennell .
- Governance safeguards: No hedging/pledging; double‑trigger CIC equity vesting; Dodd‑Frank clawback; no excise tax gross‑ups (best‑net); option/SAR repricing prohibited without shareholder approval .
Related Party Transactions, Risk Indicators & Say‑on‑Pay
- No hedging/pledging allowed (reduces misalignment risk) .
- Option repricing prohibited without shareholder approval (avoids repricing red flag) .
- 2024 Say‑on‑Pay support: 95.8% “FOR,” indicating strong shareholder endorsement of compensation program .
- No SERP; limited perquisites; standard 401(k) with match; clawback in place .
Compensation Peer Group (Benchmarking)
- 2024 peer group (14 REITs), adjusted for M&A; includes ADC, EPRT, NNN, FR, PLYM, FCPT, SILA, EGP, LTC, STAG, EPR, LXP, DEA, and CTRE; BNL targets approximate median size positioning within the set .
Vesting Schedules and Potential Insider Selling Pressure
- Time-based RS vesting cadence is modest in 2026–2028 (15,484; 9,028; 4,840 shares), with a large 5‑year cliff vest (retention) in 2029 (80,673 shares), which could create concentrated liquidity around 2/28/2029; PSUs settle based on performance at 2/28/2027 .
- 2024 vested shares involved tax withholding (4,810 shares withheld), not indicative of discretionary selling .
Performance & Track Record
- 2024 operating execution: AFFO/share $1.43 (top end of guidance), 99.1% occupancy, rent collection 99.1%, and Net Debt/Annualized Adjusted EBITDAre 5.0x; pivoted portfolio away from clinical healthcare assets and executed acquisitions/developments at 7.2–8.6% SL yields/rates .
- TSR context: Since the September 2020 IPO, BNL cumulative TSR ended 2024 at $127.50 vs MSCI US REIT at $143.91; CAP pay outcomes track TSR over time as program is equity‑heavy .
Equity Ownership & Beneficial Holders Context
- Fennell beneficially owns 173,429 shares; total shares outstanding 189,051,114; large institutional holders include Vanguard (14.70%), BlackRock (10.15%), and Principal RE Investors (7.53%) .
Employment & Contracts: Change‑of‑Control Economics
- Double‑trigger vesting on assumed awards; severance escalates to 2x base+target bonus (CFO) within the CIC window; best‑net treatment of 280G excise tax ensures no gross‑up but optimizes after‑tax value .
Investment Implications
- Alignment and retention: Significant unvested equity (especially the 2029 cliff) promotes retention and aligns incentives through 2029; prohibition on hedging/pledging reduces agency risk .
- Pay-for-performance integrity: Heavy weighting to rTSR PSUs and rigorous annual metrics (AFFO/share, leverage, occupancy) support line‑of‑sight and capital efficiency; the absolute TSR modifier curbs windfalls in down markets .
- Potential overhang/supply event: The 80,673‑share 2029 cliff could concentrate selling pressure near vest; monitor Form 4s near annual vest dates and 2029 cliff .
- Transaction incentives: CIC severance of 2x base+target bonus and double‑trigger equity vesting are standard but meaningful; not excessive (no gross‑ups), yet could modestly bias toward strategic alternatives if value‑accretive .
- Shareholder support: 95.8% Say‑on‑Pay support indicates low governance friction and decreases risk of abrupt comp program changes .