Keith Kennedy
CareDxAbout Keith Kennedy
Keith Kennedy is Chief Operating Officer of CareDx (appointed effective September 12, 2024) and is 55 years old, with a B.S. in Accounting from Indiana University, an M.B.A. from William & Mary, and professional designations as a CPA and CFA . He previously served as COO (2019–2021) and CFO (2016–2021) of Veracyte, CFO of PharmaLogic (2022–2024), and held senior roles at MCG Capital, GE Capital, Ernst & Young, and as an officer in the U.S. Air Force, bringing deep finance and operations expertise in diagnostics and healthcare services . Performance context for pay-for-performance alignment: CareDx delivered 2024 revenue of $333.8M (+19% YoY) and GAAP net income of $52.5M; 2024 TSR equated to $99.26 on a $100 initial investment vs. Nasdaq Biotech Index $118.20; in Q3 2025, revenue grew 21% YoY to $100.1M with adjusted EBITDA of $15.3M and FY25 guidance raised to $372–$376M revenue and $35–$39M adjusted EBITDA . 2024 annual bonus funding for NEOs was driven by Revenue (40%), Adjusted EBITDA (40%), and Cash (20%), with a 200% Company Factor after all three exceeded the 200% targets, underscoring strong execution against financial goals .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PharmaLogic Holdings Corp | Chief Financial Officer | 2022–2024 | Led finance for radiopharma CDMO; expanded CFO track record in healthcare services |
| Veracyte, Inc. | Chief Operating Officer; Chief Financial Officer; Secretary | COO 2019–2021; CFO 2016–2021; Secretary 2017–2020 | Scaled operations and finance at a leading diagnostics company |
| MCG Capital Corporation | CEO/President/Director; CFO & Treasurer; EVP/MD | CEO/President/Director 2014–2015; CFO 2012–2014; EVP/MD 2012–2014 | Ran a public BDC through strategic transition and merger |
| GE Capital | Managing Director | Prior to 2012 | Principal investing and portfolio leadership experience |
| Ernst & Young LLP | Manager, Transaction Services | Prior to GE | Deal diligence and transaction advisory |
| U.S. Air Force | Officer | Earlier career | Leadership foundation and discipline |
Fixed Compensation
| Component | 2024 Terms/Outcome |
|---|---|
| Base Salary | $575,000 initial annualized base salary (offer letter dated July 27, 2024) |
| Target Bonus % | 60% of base salary (pro‑rated in 2024) |
| Actual 2024 Bonus Paid | $204,346 (based on 200% Company Factor and eligible earnings) |
Performance Compensation
Annual Cash Bonus (2024 design and outcome)
| Metric | Weight | Target Framework | Actual Performance | Payout Factor |
|---|---|---|---|---|
| Revenue | 40% | Thresholds set at <50%, 100%, 200% achievement | Exceeded 200% threshold | Company Factor set to 200% |
| Adjusted EBITDA | 40% | Thresholds set at <50%, 100%, 200% achievement | Exceeded 200% threshold | Company Factor set to 200% |
| Cash | 20% | Thresholds set at <50%, 100%, 200% achievement | Exceeded 200% threshold | Company Factor set to 200% |
Equity Awards (Inducement; granted September 12, 2024)
| Type | Grant Date | Shares/Options | Exercise Price | Grant Date Fair Value | Vesting | Expiration |
|---|---|---|---|---|---|---|
| RSUs (Inducement) | 9/12/2024 | 70,101 | — | $2,063,072 | 25% on each 1‑year anniversary of grant date (years 1–4), subject to continued service | — |
| Stock Options (Inducement) | 9/12/2024 | 100,651 | $29.43 | $2,063,346 | 25% on 1‑year anniversary; remainder 1/48 monthly thereafter, subject to continued service | 9/12/2034 |
Notes:
- Inducement awards were granted outside the 2024 Plan under Nasdaq Listing Rule 5635(c)(4) .
- 2025 annual executive equity program is 70% RSUs and 30% PRSUs; PRSUs use Revenue as the metric over 2025–2026 with 50%/100%/200% thresholds and an additional year of service vesting post performance period .
Equity Ownership & Alignment
- Unvested equity at 12/31/2024: 70,101 RSUs (market value $1,500,862 at $21.41/share) and 100,651 unexercisable options at $29.43 strike; no exercisable options as of 12/31/2024 .
- Options underwater at 12/31/2024 (exercise price $29.43 vs. $21.41 close), implying zero intrinsic value then and reduced near‑term exercise pressure .
- Executive Stock Ownership Policy: CEO 3x base salary, other executives 1x base salary; six‑year compliance window (or by the 2025 annual meeting, if later) .
- Insider Trading Policy: Hedging prohibited; pledging restricted and requires pre‑clearance .
- Rule 10b5‑1 Plans: Executives may adopt trading plans; no specific plan for Mr. Kennedy is disclosed in the proxy .
- Related Party Transactions: None involving executives since 1/1/2024 beyond compensation arrangements .
- Clawback: Restated Nasdaq Rule 10D‑1 compliant clawback policy effective Oct 1, 2023 (covers incentive‑based comp upon restatement) .
Employment Terms
| Term | Detail |
|---|---|
| Employment | At‑will; offer letter dated July 27, 2024; COO effective September 12, 2024 |
| Severance (Outside Change‑of‑Control) | 12 months’ base salary and 12 months’ continued benefits; if terminated before 1‑year anniversary of start date, inducement equity vests pro rata |
| Change‑of‑Control (Double Trigger) | If terminated without cause within 2 months before or 12 months after a CoC: 12 months’ base salary, 100% of target annual bonus, 12 months’ benefits, and 100% acceleration of unvested equity (performance deemed at target) |
| Tax Gross‑Ups | No COI/CIC tax gross‑ups under 2024 Plan governance features |
| Clawback & Policies | Company‑wide clawback; anti‑hedging; pledging restrictions with pre‑clearance |
Potential Payments (as if events occurred on 12/31/2024; per proxy methodology)
| Scenario | Cash Payments | Benefits Continuation | Value of Equity Accelerated |
|---|---|---|---|
| Termination without cause (outside CoC window) | $575,000 | $45,985 | $113,079 |
| Termination without cause (during CoC window) | $779,346 | $45,985 | $1,500,862 |
Investment Implications
- Pay-for-performance alignment: 2024 bonus funding tied to Revenue/Adjusted EBITDA/Cash all exceeded 200% targets (Company Factor 200%), and 2025 LTIs shift toward PRSUs with Revenue as the performance metric, tightening alignment to top‑line growth .
- Vesting and potential selling pressure: RSUs vest annually starting each September 12 from 2025–2028; options vest monthly after the first anniversary. These events can create periodic liquidity windows, typically managed via blackout policies and potential 10b5‑1 plans; options were underwater at 2024 year‑end, reducing near‑term exercise-related supply .
- Retention risk: Standard 12‑month severance and benefits, plus pro‑rata vesting of inducement equity if terminated before first anniversary, mitigate early tenure turnover risk; annual RSU vesting also serves as a retention lever .
- Change‑of‑control economics: Double‑trigger 1x salary + 1x target bonus and 100% equity acceleration (at target for performance awards) are material but within market norms for diagnostics/tools; no tax gross‑ups and anti‑repricing governance reduce red flags .
- Performance backdrop: 2024 revenue grew 19% with positive GAAP net income, and FY25 guidance was raised after strong Q3 trends—factors that support the likelihood of incentive realizations while anchoring compensation outcomes to improving fundamentals .
Overall: Kennedy’s package is heavily equity‑based with clear service and performance links, balanced severance protections, and standard governance guardrails (clawback, anti‑hedging/pledging). Annual RSU vesting is the primary timing vector for potential insider supply, while underwater options limit near‑term option exercises .