Karthik Kuppusamy
QUEST DIAGNOSTICSAbout Karthik Kuppusamy
Karthik Kuppusamy, Ph.D., is Senior Vice President, Clinical Solutions at Quest Diagnostics (DGX), overseeing key clinical franchises (Cardiovascular, Metabolic & Endocrinology, Drug Monitoring & Toxicology, Infectious Disease & Immunology, Neurology, Women’s & Reproductive Health), plus genomic customer services, medical affairs, regulatory, LifeLabs and global markets; he assumed this role in August 2022 after joining DGX in 2014 from GE Healthcare’s Diagnostics Imaging Division and is age 55 . DGX delivered 2024 net revenues of $9.87B (+6.7% YoY) with adjusted diluted EPS of $8.93; TSR was 11.8% for 2024, -7.3% for 2022–2024, and 56.3% for 2020–2024, contextualizing pay-for-performance alignment across SMIP and PSUs that drive executive payouts .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Quest Diagnostics | SVP, Clinical Solutions | Since Aug 2022 | Multi-franchise leadership; adds oversight of genomics, medical affairs, regulatory, LifeLabs, global markets |
| Quest Diagnostics | VP & GM, Diagnostics Info Services – North Region | Since 2018 | Regional P&L and operations leadership |
| Quest Diagnostics | GM, Neurology Franchise & Consumer Genetics | 2014–2017 | Built specialty franchises (neurology, consumer genetics) |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| GE Healthcare (Diagnostics Imaging Division) | General manager roles in product development, R&D, sales & marketing | Prior to 2014 (joined DGX in 2014) | Broad operating leadership across imaging and commercial functions |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $512,500 | $543,269 |
| Target Bonus (% of Salary) | 70% (SMIP) | 70% (SMIP) |
| Actual Annual Incentive ($) | $290,991 | $367,359 |
| Actual Payout vs Target (%) | 96.6% (company SMIP factor) | 96.6% (company SMIP factor) |
| Actual Payout vs Salary (%) | 56.8% (calc: $290,991/$512,500; SMIP factor 96.6%) | 67.6% |
| All Other Compensation ($) | $36,813 | $51,664 |
| Total Compensation ($) | $2,015,205 | $2,277,691 |
Performance Compensation
Annual Incentive (SMIP) – 2024 Design and Outcomes
| Metric | Weight (%) | Target | Actual | Payout Factor (%) | Vesting/Payment Timing |
|---|---|---|---|---|---|
| Adjusted Diluted EPS | 40 | $9.00 | $8.84 (incentive purposes) | 29.6 | Paid on/before Mar 15 following year |
| Revenue (incl. COVID-19 & Acquired) | 40 | $9,512MM | $9,631MM (incentive purposes) | 46.8 | Paid on/before Mar 15 following year |
| Non-financial (Patient/Employee/Community) | 20 | Target | 115.9% patient/employee; community at target | 20.2 | Paid on/before Mar 15 following year |
| Total SMIP Payout Factor | — | — | — | 96.6 | Paid on/before Mar 15 following year |
Long-Term Incentives – 2024 Grants (Grant Date: Feb 14, 2024)
| Award Type | Shares/Units (#) | Fair Value ($) | Vesting | Key Terms |
|---|---|---|---|---|
| Performance Shares (2024–2026 cycle) – Threshold | 395 | Included in stock awards | Cliff vest after performance period (Feb 14, 2027) | Metrics: Revenue growth 50%, Avg ROIC 30%, Relative TSR 20% |
| Performance Shares – Target | 5,263 | Included in stock awards | Cliff vest (Feb 14, 2027) | Relative TSR payout curve disclosed; negative TSR capped at 125% |
| Performance Shares – Maximum | 10,526 | Included in stock awards | Cliff vest (Feb 14, 2027) | Double trigger CIC vesting |
| RSUs | 2,641 | $337,533 | 1/3 annually over 3 years | Dividend equivalents on RSUs; retirement vesting after 1 year |
| Stock Options | 11,007 | $337,359 | 1/3 annually over 3 years | Exercise price $127.81; expires 2/14/2034 |
Prior PSU Earn-outs (for context)
| Performance Period | Paid Year | Kuppusamy Shares Earned (#) |
|---|---|---|
| 2021–2023 | 2024 | 2,039 |
Relative TSR Payout Curve (2024 PSUs)
| Relative TSR Percentile | Earnings Multiple (applies to 20% TSR tranche) |
|---|---|
| ≥75th | 2.0× |
| 50th | 1.0× |
| 25th | 0.5× |
| <25th | 0×; negative TSR capped at 125% payout |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Shares Beneficially Owned | 10,090 |
| Options Exercisable within 60 days | 27,739 |
| Total (Shares + Exercisable Options) | 37,829 |
| RSUs (Unvested/Outstanding) | 4,981 |
| Ownership as % of Outstanding | <1% (each NEO and group) |
| Stock Ownership Guideline | 4× base salary for executive officers |
| Compliance Status | All currently employed NEOs compliant as of Apr 1, 2025 |
| Retention Requirement | Retain 50% of net shares until guideline met |
| Hedging/Pledging | Prohibited for directors and executive officers |
| Insider Trading Windows | Trades generally limited to windows post earnings releases |
Vesting and realizations in 2024:
- RSUs vested 1,467 shares ($190,805); PSUs paid 2,039 shares ($254,916); total 3,506 shares ($445,721) .
- No option exercises reported in 2024 for Kuppusamy .
Employment Terms
| Provision | Key Terms |
|---|---|
| Role start | Current role assumed August 2022 |
| Severance Plan Tier | Schedule B participant |
| Non-CIC Qualifying Termination | 1× base salary + 1× target annual incentive; benefits (12 months medical/life), outplacement, prior-year 401(k)/SDCP match lump sum |
| CIC Double Trigger | 2× base salary + 2× target annual incentive; prorated target incentive for year; accelerated equity (options/RSUs/PSUs); same benefits; cutback to avoid 280G excise tax (no gross-ups) |
| “Cause” / “Good Reason” | Defined (including willful failure, misconduct, felony; adverse changes in role/comp/pay/location, plan failures) |
| Non-compete / Non-solicit | Agreement to covenants for a period following termination |
| Clawbacks | Dodd-Frank compliant policy plus discretionary recoupment covering cash and equity for current/former execs |
Estimated payouts (as of 12/31/2024; stock at $150.86):
- Involuntary termination (non-CIC): Cash comp $935,000; accelerated PSUs $1,173,842; total $2,208,842 (incl. benefits noted) .
- CIC termination: Cash comp $1,870,000; accelerated options $332,111; accelerated PSUs $2,748,326; accelerated RSUs $1,095,244; total $6,145,681 (subject to potential 280G cutback) .
Investment Implications
- Pay-for-performance alignment: 2024 SMIP weighted to adjusted EPS (40%) and revenue (40%) yielded a 96.6% payout; 3-year PSUs emphasize revenue growth (50%), ROIC (30%), and relative TSR (20%), with prior 2021–2023 cycle paying 2,039 shares to Kuppusamy, reinforcing linkage to strategic and financial outcomes .
- Retention risk: Multi-year vesting (RSUs/options ratable; PSUs cliff in 2027), double-trigger change-in-control vesting, and Schedule B severance reduce near-term attrition risk; estimated CIC value $6.15M and non-CIC value $2.21M illustrate economic stakes in continued tenure and performance .
- Ownership alignment and trading pressure: Beneficial ownership plus in-the-money equity is modest vs float (<1%); mandatory retention (50% net shares), anti-hedging/pledging policies, and windowed trading reduce misalignment and near-term selling pressure; no option exercises in 2024 and scheduled RSU/PSU vestings suggest predictable supply around anniversaries and Q1 PSU settlements .
- Governance quality signals: No excise tax gross-ups, robust clawbacks, double-trigger CIC equity vesting, and strong say-on-pay support (89% in 2024) indicate shareholder-friendly constructs and disciplined compensation oversight relative to a healthcare peer set .