Stephen Keller
Compass DiversifiedAbout Stephen Keller
Stephen Keller, age 50 as of April 1, 2025, has served as CODI’s Chief Financial Officer since August 31, 2024. He holds a BA from the University of Iowa and an MBA from the Kellogg School of Management (Northwestern University) . CODI reported strong 2024 performance under the current leadership team: net sales of approximately $2.2 billion (+11.9% YoY), adjusted EBITDA of $424.8 million (+30%+ YoY), and adjusted EBITDA margin of 19.3%; CODI’s 2024 TSR translated to $125.79 on a $100 initial investment and net income was $47.35 million . Keller’s CFO bonus framework is discretionary and tied to finance function execution rather than Company-level metrics (pay-for-performance linkage to TSR or EBITDA is limited) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Envista Holdings (NYSE: NVST) | Interim Chief Financial Officer; Vice President, Investor Relations; Vice President, Strategy & Business Development; VP/GM, Nobel Biocare Prosthetics | Not disclosed | Led finance, IR, and strategic/business development; operated a product P&L (Prosthetics), bridging strategy with execution |
| Avery Dennison (NYSE: AVY) | VP, Strategy & Corporate Development; VP, Finance, Asia; VP/GM, New & Emerging Markets, RBIS Division | Not disclosed | Drove corporate strategy, Asia finance leadership, and growth in new markets in a global materials science company |
External Roles
| Organization/Body | Position | Years | Notes |
|---|---|---|---|
| Compass Group Management (Manager) | Investment Committee Member | 2024–present | Manager is CODI’s external manager; Keller participates in investment decisions |
| CODI | Sustainability Committee Member | 2024–present | Supports ESG integration across portfolio |
| CODI | Enterprise Risk Management Committee Member | 2024–present | Oversees enterprise risk reporting to Board committees |
| CODI Subsidiaries | Board Observer | 2024–present | Observer to boards of all subsidiary companies |
Fixed Compensation
| Metric | FY 2024 | FY 2025 |
|---|---|---|
| Base Salary (per annum, $) | $600,000 | $600,000 (not increased) |
| Salary Paid (actual, $) | $200,000 (partial year from Aug 31, 2024) | Not disclosed |
| Housing Reimbursement (max $/month) | Up to $3,000/mo for 24 months from Aug 31, 2024 | Up to $3,000/mo |
| Other Compensation (healthcare, insurance, 401k) ($) | $40,866 | Not disclosed |
Notes: Company uses an external management model; CFO compensation is paid by the Manager and reimbursed by CODI; Compensation Committee approves reimbursement .
Performance Compensation
| Component | Metric | Target | Actual (FY 2024) | Payout | Vesting/Clawback |
|---|---|---|---|---|---|
| Annual Cash Bonus | CFO discretionary bonus (not tied to Company performance) | ≥50% of base salary | Not disclosed (discretionary) | Discretionary | N/A |
| Sign-on Bonus | One-time commencement bonus | N/A | $250,000 | Lump sum | Subject to clawback if terminated for “proper cause” or resigns without “good reason” before Aug 20, 2025 |
| Equity Awards | RSUs/PSUs/Options | N/A | None | N/A | N/A |
Design of metrics and weighting: CFO bonus is assessed on internal controls, finance team management, reporting timeliness, auditor interactions, subsidiary engagement, capital raising, and IR effectiveness; not based on CODI revenue, EBITDA, or TSR .
Equity Ownership & Alignment
| Item | As of |
|---|---|
| Beneficial Ownership (shares) | 11,840 (less than 1%) as of April 1, 2025 |
| Equity Awards Outstanding | None (no stock options/RSUs/PSUs) |
| Hedging/Pledging | Prohibited; no margin accounts or pledged shares for executives/directors |
| Stock Ownership Guidelines | Apply to non-management directors (5x annual cash retainer); CFO not subject |
| Allocation Member (profit interest) | Executives (including Keller) collectively held ~54% of Allocation Member at Dec 31, 2024; Keller received $0 distributions tied to 2024 profit allocation payments |
Implication: Keller’s “skin-in-the-game” in CODI stock is modest; potential alignment may come from Allocation Member equity, but no distributions were paid to Keller in 2024, limiting near-term incentive linkage .
Employment Terms
| Provision | Details |
|---|---|
| Severance (non-cause termination or good reason) | Lump sum equal to 50% of base salary if termination date prior to Sep 1, 2025; 75% if on/after Sep 1, 2025; 2024 example ~ $390,000 |
| Bonus upon certain terminations | If termination after year-end for death/disability, not for “proper cause,” or for “good reason,” bonus payable without regard to termination |
| Definitions | “Proper cause” includes material breach, dishonesty/gross negligence/misconduct, fiduciary breach, failure to follow directives, certain crimes, fraud/embezzlement . “Good reason” includes uncured material breach by Manager or relocation >60 miles without consent |
| Relocation stipend | Up to $3,000/month rent near Costa Mesa for 24 months from Aug 31, 2024 |
| Clawback Policy | Company clawback adopted in 2023 to recoup erroneously awarded executive compensation upon accounting restatements, per SEC/NYSE rules |
| Insider Trading Policy | Prohibits short sales, hedging, margin accounts, pledging by executives/directors |
Performance & Track Record
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Net Sales ($) | $2.1 billion | ~$2.2 billion (+11.9% YoY) |
| Adjusted EBITDA ($) | $340.9 million | $424.8 million (+30%+ YoY) |
| Adjusted EBITDA Margin (%) | Not disclosed | 19.3% |
| Net Income ($000s) | $262,405 | $47,350 |
| TSR – Value of $100 Investment | $116.99 | $125.79 |
| Peer Group TSR – Value of $100 | $125.55 | $186.97 |
Notes: TSR reflects CODI’s total shareholder return path; 2024 TSR underperformed peer group despite strong EBITDA growth, complicating pay-for-performance narratives .
Governance, Compensation Oversight, and Shareholder Feedback
- Compensation Committee responsibilities include approving CFO compensation reimbursement, administering clawback policy, and oversight of management fee/incentive fee structures; members: Harold S. Edwards (Chair), Alexander S. Bhathal, Gordon M. Burns .
- Use of compensation consultants: Mercer (director compensation benchmarking; peer analysis), Oppenheimer & Co. (manager/peer benchmarking), Egon Zehnder (CFO recruiting/market compensation insights) .
- Say-on-Pay approval: 84.60% support in 2024, consistent with multi-year >80% support trend .
Risk Indicators & Red Flags
- Restatements and investigation: CODI filed an NT 10-Q citing ongoing Audit Committee investigation and expected restatements of FY 2022–2024; Keller was listed as contact and signed as CFO . Execution and reporting risk are elevated until resolution.
- Forbearance and lender agreements: Keller signed a Third Forbearance Agreement with lenders and multiple 8-Ks, signaling near-term covenant and liquidity management focus .
- Insider trading controls/pledging: Strict prohibitions mitigate hedging/pledging risks; no margin/pledge usage by executives/directors .
Compensation Structure Analysis
- Cash-heavy pay mix: CFO compensation is primarily fixed cash with a discretionary bonus; lack of equity awards results in limited direct alignment with TSR or EBITDA targets (positive: avoids forced selling pressure; negative: weaker pay-for-performance linkage) .
- Incentive design: CFO bonus is tied to finance-function operational metrics (controls, reporting timeliness, audit cooperation, capital markets/IR), not Company KPIs (revenue/EBITDA/TSR). Targets are qualitative and discretionary, making payout calibration less transparent .
- Manager/Allocation economics: Management fee restructured (base sliding scale and incentive fee subject to IRR hurdle and Compensation Committee approval), and executives have Allocation Member interests; however, Keller received no Allocation distribution in 2024 .
Investment Implications
- Alignment: Keller’s CODI share ownership is modest and the CFO bonus is not tied to Company TSR/EBITDA, limiting direct shareholder alignment; however, strict anti-pledging rules reduce forced-selling risk .
- Retention: Severance at 50–75% of base and relocation support provide moderate retention economics; sign-on clawback until Aug 20, 2025 adds near-term stickiness .
- Execution risk: Ongoing restatement/investigation and lender forbearance agreements elevate reporting and financing risk; CFO performance metrics emphasize internal controls and timeliness, which is appropriate given current circumstances .
- Governance: Compensation Committee oversight and a formal clawback policy are positives; Say-on-Pay support remains strong, suggesting investor acceptance of the external manager model and CFO compensation design .