Kenneth E. Johnson
Cable OneAbout Kenneth E. Johnson
Kenneth E. Johnson is Chief Operating Officer of Cable One (Sparklight) since March 1, 2024 (age 60). He previously served as Chief Technology & Innovation Officer (Oct 2023–Feb 2024), Chief Technology & Digital Officer (Jan–Sep 2023), and SVP, Technology Services (May 2018–Dec 2022); he joined Cable One in 2017 via the NewWave acquisition after COO/CTO roles at NewWave and CTO roles at SureWest and Everest Connections. He serves on the board of the Society of Cable Telecommunications Engineers (SCTE) . Operating context under senior leadership: 2024 revenue declined to $1.58B (from $1.68B), Adjusted EBITDA to $854.0M (from $916.9M), and net income to $14.5M (from $224.6M), informing incentive outcomes tied to residential HSD growth and adjusted free cash flow metrics .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Cable One (Sparklight) | Chief Operating Officer | Mar 2024–present | Leads operations incl. technology, customer experience, field and call center operations . |
| Cable One | Chief Technology & Innovation Officer | Oct 2023–Feb 2024 | Led technology and parts of operations . |
| Cable One | Chief Technology & Digital Officer | Jan–Sep 2023 | Drove technology and digital initiatives . |
| Cable One | SVP, Technology Services | May 2018–Dec 2022 | Oversaw technology services during network upgrade cycle . |
| Cable One | VP, Northeast Division | 2017 | Post-NewWave acquisition operating leadership . |
| NewWave | COO and CTO | –through 2017 | Executive leadership pre-acquisition; network/ops leadership . |
| SureWest Communications | CTO | Not disclosed | Regional telecom CTO experience . |
| Everest Connections | CTO | Not disclosed | Telecom CTO experience . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Society of Cable Telecommunications Engineers (SCTE) | Board member | Not disclosed | Industry standards and workforce development body . |
Fixed Compensation
| Year | Base salary ($) | Target bonus (% salary) | Actual annual bonus ($) |
|---|---|---|---|
| 2023 | 330,000 | 90% | 161,739 |
| 2024 | 380,000 effective Jan 1; 420,000 effective Mar 1 | 90% | 228,684 (payout factor 72.4%) |
| 2025 | 475,000 | 90% | Not disclosed |
Notes:
- 2024 base increased twice due to promotions (CTIO → COO). 2024 bonus funded on adjusted residential HSD growth and STI adjusted free cash flow growth; performance factor 72.4% applied .
- 2025 base increased to address market shortfalls; bonus target % unchanged at 90% .
Performance Compensation
Short-term Incentive (STI) – 2024 design and outcome
| Metric | Definition per plan | Target (if disclosed) | Actual/Result | Payout impact |
|---|---|---|---|---|
| Residential HSD subscriber growth (adjusted) | YoY change in residential data PSUs, adjusted to exclude ACP termination impact and certain small M&A | 2.1% target (disclosed in footnote) | 0.8% after adjustments | Contributed to blended 72.4% factor |
| STI Adjusted Free Cash Flow Growth | YoY change in Adjusted EBITDA less Capex, with pre-set adjustments for expansions/integration/other | Not disclosed | (1.3)% | Contributed to blended 72.4% factor |
| Overall STI factor | Weighted blend (weighting not disclosed) | — | 72.4% | Applied to individual targets |
Discretion: Committee retained discretion to reduce payouts; no upward discretion permitted; 2024 formula adjusted solely to exclude unexpected ACP termination impact for fairness .
Long-term Incentives (LTI) – structure, metrics, and grants
Program design: 60% PSUs (performance-based), 40% RSUs (service-based). PSU performance: (i) 1-year LTI Adjusted Free Cash Flow goal (Adjusted EBITDA less Capex growth 2024 vs 2023) with 0–200% payout; (ii) 3-year relative TSR modifier (0.75x–1.25x), for 0–250% total PSU payout; PSUs cliff-vest after the 3-year period upon certification; RSUs vest in three annual installments .
| Grant date | Award type | Target units (#) | Grant date fair value ($) | Vesting/Performance |
|---|---|---|---|---|
| Jan 3, 2024 | PSUs | 1,995 | 1,204,441 | 2024 LTI FCF goal; 3-yr TSR modifier; vest cert in Q1’27 |
| Jan 3, 2024 | RSUs | 1,330 | 719,996 | 1/3 on each of Jan 3, 2025/2026/2027 |
| Mar 1, 2024 (promotion) | PSUs | 393 | 200,568 | Same PSU terms as above |
| Mar 1, 2024 (promotion) | RSUs | 262 | 119,899 | Same RSU vesting cadence |
| Jan 3, 2025 | PSUs | 3,857 | 1,440,000 | 2025 LTI FCF goal; 3-yr TSR modifier; vest cert in Q1’28 |
| Jan 3, 2025 | RSUs | 2,571 | 960,000 | 1/3 annually over 3 years |
Other design features: No new options; SARs not granted since 2021; no repricing without shareholder approval . Stock ownership guidelines and clawbacks apply (see below) .
Equity Ownership & Alignment
Beneficial ownership and alignment policies
| Item | Detail |
|---|---|
| Shares beneficially owned | 2,766 shares (<1% of outstanding) as of Mar 31, 2025; includes 48 restricted shares . |
| Shares outstanding (denominator) | 5,627,527 as of Mar 31, 2025 . |
| Ownership guidelines | C‑suite officers required to hold 3.5x base salary; compliance period 5 years . |
| Compliance status | All continuing NEOs in compliance as of Dec 31, 2024 . |
| Hedging/pledging | Prohibited (short sales, derivatives, pledging, margin), with pre-clearance and blackout windows . |
| Clawbacks | SEC Rule 10D-1 compliant ICRP; additional misconduct/restatement clawback; Oct 2024 restatement required no recoupment . |
Outstanding equity and vesting overhang (12/31/2024)
| Instrument | Quantity | Notes (pricing/valuation basis) |
|---|---|---|
| Unvested RSUs | 1,330 + 262 | Jan 2024 and Mar 2024 grants; scheduled to vest 1/3 on Jan 3, 2025/2026/2027 . |
| Unearned PSUs (2023 grant) | 2,262 (max shown; final depends on perf) | Performance period 2023–2025; determination by Q1’26 . |
| Unearned PSUs (2024 grants) | 4,987 + 982 (max shown; final depends on perf) | Performance period 2024–2026; determination by Q1’27 . |
| SARs (exercisable) | 366 @ $719.01 (exp 7/3/2027); 1,000 @ $707.17 (exp 1/3/2028); 1,500 @ $811.96 (exp 1/3/2029) | All deeply out-of-the-money vs $362.12 stock price at 12/31/2024 and $265.77 at 3/31/2025 used for beneficial ownership; low exercise/selling pressure . |
Vesting calendar indications:
- RSUs from 2023 and 2024 grants have scheduled vest dates on Jan 3, 2025/2026/2027; 2024 Mar grant aligns to the same annual dates .
- PSUs: 2023 cohort determination by Q1’26; 2024 cohorts by Q1’27 (service condition through determination dates) .
Employment Terms
- Termination (no-CoC): Upon involuntary termination without cause or resignation for good reason after 1-year from grant, RSUs/RSAs/SARs prorate; PSUs/PSAs remain outstanding and prorate subject to certified performance .
- Change-in-control: Double-trigger vesting only (no single-trigger). If awards are not assumed or qualifying termination occurs within 18 months post-CoC, unvested equity vests (PSUs at target if performance undetermined) .
- Executive Severance Plan (CoC protection period: 3 months prior to CoC to 18 months after): C‑suite lump sum = 2.5x (base salary + target bonus) + pro‑rated target bonus for year of termination + lump sum equal to 18 months COBRA premiums; Good Reason includes material pay/title cuts or relocation >50 miles .
- Perquisites: Very limited; e.g., telecom service reimbursement; 401(k) match up to 5% .
Compensation Structure Analysis
- High at-risk pay: Majority of Johnson’s 2024 target total direct compensation is variable (STI + LTI), consistent with company-wide pay-for-performance .
- Mix shift favors performance equity: 60% PSUs and 40% RSUs; Company ceased option/SAR granting (no SARs since 2021) reducing leverage and emphasizing performance stock .
- Year-over-year changes: Base increased from $330k (2023) to $380k (Jan 1, 2024) and $420k (Mar 1, 2024) with promotion; 2025 base $475k. LTI grant face value increased from $1.05M in 2023 to $2.10M in 2024 (plus $300k promotion grant) and to $2.40M in 2025, signaling retention focus and scope expansion .
Related Party / Governance Checks
- Say-on-Pay: 97% approval at 2024 annual meeting supports program credibility .
- C&TM Committee and consultants: Independent C&TM (Compensation & Talent Management) Committee; engaged FW Cook (2024) and then Pearl Meyer (2025); independence affirmed .
- Interlocks/transactions: No 2024 relationships/transactions requiring disclosure between the Company and any C&TM Committee member .
Investment Implications
- Incentive alignment: Johnson’s incentives are directly tied to free cash flow discipline (Adjusted EBITDA – Capex) and relative TSR over multi-year periods; 2024 STI results (72.4% payout) reflect challenging year with HSD growth below target and negative adjusted FCF growth, aligning pay outcomes to performance .
- Retention risk vs. selling pressure: Substantial unearned PSU overhang and multi-year cliff vesting reduce near-term selling; RSUs vest annually (notably in early January each year), which could be modest selling catalysts. Legacy SARs are far out-of-the-money, lowering exercise pressure. Hedging/pledging prohibitions and robust clawbacks further align behavior and reduce adverse trading optics .
- Ownership alignment: Beneficial ownership is <1%, but adherence to 3.5x salary ownership guideline and compliance status mitigate alignment concerns; no pledging allowed .
- Change-in-control economics: 2.5x salary+target bonus (double-trigger) is within market norms, with PSUs at target on CoC if performance undetermined, which sets a defined floor on equity treatment but avoids single-trigger windfalls .
Overall, compensation is heavily performance-weighted with clear FCF/TSR levers; vesting calendars and underwater SARs suggest limited mechanical selling pressure, while increased 2024–2025 LTI sizing and base adjustments indicate proactive retention for a broadened operating remit .